Global Trend: Smart Buildings

global trend smart buildings


The real estate sector has recently been marked by the advent of "PropTech". PropTech (or property technology) has been described as a "new explosive wave of innovation", seeing start-up companies pioneer technological products to address a range of inefficiencies in the property market. For example, Airbnb and buyMyplace are among the most prominent PropTech inventions (or "disruptors"), which have transformed the traditional property leasing and purchasing markets.

One of the key issues that has recently been targeted by the PropTech movement is environmental sustainability and energy efficiency in businesses. The notion of "smart buildings" originated from the PropTech uprising. In essence, smart buildings use tech-platforms to facilitate the operation and management of buildings in more efficient ways.

PropTech’s foray into the environmental sustainability field may have been driven by recent data, which indicate that 40 percent of total energy consumption worldwide is expended by residential and commercial buildings. In other words, the building sector is the largest user of end-use energy in the world.

This article looks at three of the most promising and transformative technologies that have been developed by PropTechs to facilitate "green business".

Heating, ventilation and air conditioning systems

A key trend has been the use of advanced software to improve heating, ventilation and air conditioning (HVAC) in a building. For example, software can calculate the right amount of air to condition a space at a particular time (providing less in the morning, and increasing throughout the day as outdoor temperature causes a building to heat up). Automating air handling can have enormous financial and sustainability benefits for a business, with a study conducted by Facility Executive magazine finding that by simply varying factors such as water flow, pump speed and fan speed in their HVAC system, a 220,000 sq. foot building can save 364,921 gallons of water each year. Larger premises can accrue even greater cost and energy savings, for example, a 500,000 sq. foot data center, with 3,000 tons of cooling power, can save 778, 518 gallons of water each year by ensuring best use of HVAC.

A related innovation is carbonTRACK. This is an Australian device designed to reduce costs, energy use and greenhouse gas emissions by providing facility managers with live "energy usage insights", and enabling them to remotely control (or switch off) electrical appliances from a mobile phone app.

In addition to highlighting areas where energy efficiency improvements can easily be implemented, carbonTRACK also enables users to track the results of recent efficiency upgrades, such as new LED installations in a building, for example.

Sensor-equipped lighting

One of the latest businesses to invest in "smart building" upgrades is publishing giant, The New York Times, which has recently installed smart-sensored lighting in its Manhattan headquarters. The US office was originally designed to use 1.28 watts of lighting power per sq. foot. However, after introducing a new lighting management system, the company achieved a 70 percent saving in energy usage.

Similarly, telecommunications hegemon, AT&T, has recently piloted a new program designed to lower lighting spending. AT&T replaced fluorescent lighting in 240 properties with energy-saving LED lighting integrated with smart sensor systems that monitor occupancy, light levels, temperature and energy usage. The initiative has saved AT&T approximately US$8 million a year in lighting costs.

Smart flooring solutions

In October 2017, Forbes named Pavegen one of the top five emerging PropTech start-ups to watch in the coming year. Pavegen produces a commercial smart-flooring solution in the form of high-tech paving tiles that capture the weight of a footstep and convert that kinetic energy into electricity. The renewable energy harvested from footfall can then be used to power devices or lighting installations. In November 2013, well-known shopping center chain, Westfield, installed 30 Pavegen tiles at the entrance to their flagship Pitt Street Mall in Sydney, as part of an initiative to create Australia’s first "people-powered" Christmas tree. Shoppers were invited to "lend a foot" and contribute towards illuminating two 5.5 m. Christmas trees, decorated with over 3,000 LED lights, by simply walking over the energy harnessing floor pads. For every 100,000 footsteps, 195 watt-hours were generated. The spectacular festive display was within 200 m. of DLA Piper’s Sydney office.

Further, it is pertinent to note that Pavegen’s flooring innovation is multi-functional, and can offer businesses a host of advantages in addition to improving environmental sustainability in their offices. For example, a key feature of the technology is the in-built "footfall tracking" component. This allows for the monitoring footfall patterns that can then be used to discern peak consumer periods and prime locations visited by customers. The benefits of such data for the operational or marketing strategies of a business are clear to see.

Case study: IBM - transforming the management of buildings worldwide

It’s clear from what’s been said above that businesses across the world are embracing the PropTech movement. Among these industry leaders is technology guru, IBM. The company has launched a "Smarter Planet" campaign which envisions a world where climate change and energy shortages can be ameliorated through technological innovation. To achieve this goal, IBM has created the Watson IOT Platform. Watson is an artificial intelligence and data analysis software, which is poised to transform the management of buildings around the world. The technology enables businesses to examine data uploaded onto the Watson cloud platform from devices and sensors embedded in their buildings, with the objective of obtaining the best service delivery. For example, the data recorded from sensors in doors, meeting rooms, chairs and tables can help to better manage room occupancy by informing building managers that amenities such as lighting or air conditioning can be switched off in vacant rooms, thereby reducing a building’s energy usage. Similarly, sensors in chairs and plate dispensers can even inform kitchen staff how many people may require meals; thereby preventing food wastage. The commercial appeal of the Watson Platform is evidenced by the recent agreement IBM has secured with ISS, a leading global provider of facility services, to use the Watson to transform the management of over 25,000 buildings operated by ISS across the world.


Since 2012, AU$70.4 million has been invested into PropTech start-ups in Australia and New Zealand alone, with experts projecting the PropTech movement will continue to gain momentum in the coming years. Indeed, Charter Hall, a key client of the Australian Real Estate team, and landlord of DLA Piper’s Sydney office, has already strategically invested in this area. The company has partnered with Collective Campus to provide a 13‑week accelerator program for PropTech entrepreneurs. The program is designed to equip participants with knowledge, tools, support and funding opportunities to facilitate their establishment, and to help them flourish in the post-business launch phase. The benefit to Charter Hall is an exclusive first-glance into these emerging PropTech start-ups.

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