Advantages of a building automation system (BAS) include reduction in energy consumption and operating costs of buildings, as well as non-energy benefits such as improvement in occupant comfort and the productivity of office workers.
Advantages of a building automation system (BAS) include reduction in energy consumption and operating costs of buildings, as well as non-energy benefits such as improvement in occupant comfort and the productivity of office workers. The opportunity to optimize energy consumption has spurred BAS market demand as customers aim to comply with building codes and save on utility costs.
According to Colliers International’s 2018 Asia Pacific Property Outlook report, real estate investment volumes will continue to grow due to the region’s strong economic growth and persistent low real interest rates. Demand for leased office space will remain high, says the report, especially in Hong Kong, Singapore, India and the leading Chinese cities.
Under this real estate trend in APAC is a convergence of property and technology, as more and more buildings start to adopt building automation systems (BAS) — which automatically control and monitor a building’s lighting systems; heating, ventilation, and air conditioning (HVAC); and security and access control. Such adoption has changed the way we use and interact with real estate.
Commercial buildings have always been the largest building category for smart system installation and application. As ABI Research predicts, the global commercial building automation market will reach US$45 billion by 2021.
New buildings boost the market
The Asia-Pacific region, in particular, is expected to show rapid growth due to increasing construction of high-end office buildings and their adoption of automation systems. According to Adarsh Krishnan, Senior Analyst at ABI Research
, revenue in commercial building automation in APAC is forecast to grow to over $5 billion in 2022, witnessing a compound annual growth rate (CAGR) growth of 4.7 percent from 2017 to 2022.
"The region remains the strongest globally for new construction projects, and investment in newly constructed commercial infrastructure will continue to drive sales of building automation equipment,” said Bryan Montany, Research Analyst at IHS Markit
’s Security and Building Technologies group.
He added: “The Asian market is still driven predominantly by sales of equipment to support new construction projects for buildings over 200,000 square feet in size. While retrofit projects to install equipment in preexisting buildings are becoming more common throughout Asia, over 75 percent of the market in China and over 80 percent of the market in India is accommodating new construction projects.”
Elangovan Karuppiah, CEO of the Middle East/Asia Pacific Region at Siemens Building Technologies
, also sees the Asian market potential, saying that the company expects the region to take a larger share of the global office building demand by 2020. “Of the 74 billion square feet of the global office building stock, 36 billion square feet will be in Asia, with China accounting for 69 percent,” he said.
Wang Ziquan, Director of Controls Products for Building Technologies and Solutions at Johnson Controls
, mentioned a few construction trends in Asia that could help boost the BAS market, including transportation projects in Southeast Asian countries participating in China’s One Belt One Road Initiative, China’s intention to replicate its success in infrastructure construction in the first and second-tier cities elsewhere, and India’s welcoming stance toward foreign investment.
Even though the building automation market in Asia is booming, this is not without challenges. One of the major factors that dissuade user adoption is the high cost of network infrastructure deployment for smart building technologies. “High capital expenditure and slow return on investments for building owners due to the high costs of installing building automation systems is still the biggest challenge,” said Krishnan, adding that “incumbent OEMs’ proprietary technologies result in closed ecosystems and customer lock-ins, which subsequently have an adverse impact on building owners’ adoption.”
Krishnan continued, “The big four building automation OEMs, namely Honeywell, Schneider Electric, Johnson Controls and Siemens, have more than 60-percent market share in the commercial building automation market, making it difficult for new entrants to enter the market.”
According to a Frost & Sullivan online article, another restraint that might impede adoption worldwide is the lack of knowledge by facility managers in building automation, the requirements of network infrastructure, and other engineering difficulties. John Tan, Key Account Manager at ABB, said that this is exactly the reason why ABB has been organizing seminars and presentations to spread knowledge and awareness in Singapore.
What’s more important is that the BAS with networked devices and a central management platform is open to risks of cyberattacks, putting building security in jeopardy. As a Gartner report indicates, 20 percent of smart buildings worldwide will have experienced some form of digital vandalism by 2018. Memoori’s latest smart building research report also cautioned that cyberattacks as small as nuisance attacks or as large as data breaches will adversely impact the overall operation of a commercial building. Such hacking incidents will not only threaten the safety of occupants and expose building owners to legal liabilities, but also cause irreversible damage to the reputation of the business.
Looking to the future
Commercial building automation has been, and will continue to be, an unstoppable trend in Asia, since rapid urbanization requires infrastructure specifically built to support a larger urban population.
As the construction of new buildings and implementation of government eco-friendly initiatives continue to drive the market, the building technology sector will move toward the integration of security, HVAC, lighting and other controls on a single platform. Smart building technologies can display real-time data, diagnose faulty equipment operation, and reduce energy waste. Smart offices of the future will use facial recognition for access control or notify staff when office supplies are running low. Smart lighting systems can learn user preferences over time and automatically adjust to create the most comfortable environment. Commercial buildings, including offices, retail stores, hotels and hospitals, can all benefit from adoption.