The Advent of Smart Buildings and Smart Cities

Real estate is embracing Smart Real Estate, which operates on real-time information and data-backed insights that improve form, function & performance.

Rikard Jonsson
December 13, 2021
5 min read

Table of content

Smart Real Estate
It is projected that nearly 70% of the world’s population will live in urban areas by 2050. However, some megacities are already struggling to cope with the migration of people, causing more and more players in the real estate sector to seriously push toward the concept and development of smart real estate, promoting livability and sustainability in the process.  While there is a lot to say about smart homes, (another area that has truly fast-tracked in trending topics over the last few years), it’s important to take in the reasons why smart buildings and smart cities are also trending. 

At its core, smart real estate operates on the basis of real-time data, and works alongside that insight to improve form, function, and performance. The Internet of Things comes into play, because smart real estate requires IoT-driven smart building solutions, turning practically any physical object related to a property’s performance into a source of valuable, trackable data. It has dramatically altered the way business is done, with shifting client preferences driving demand and transaction, and the ongoing transfer of decision-making power from baby boomers to millennials has also been a catalyst for the fervent pushing of technological efforts in real estate investment possibilities. It is why buildings of the future will be naturally incorporating IoT platforms that combine smart applications and cloud technologies. 

Smart buildings

Use a combination of technologies to automate building management and to manage operations, including temperature and lighting. Sensors detect changes and feed that data to the software. With the help of sensors responding to that information and sending out information of their own, the ‘smart building’ can target changes only to the rooms or spaces that require it. 

The benefits are plenty. A smart building:

  • Saves energy, (for example, we already see this in smart homes where a smart HVAC system will detect ambient temperature and turn it on before occupants enter the house). According to JLL, smart buildings could improve general efficiency levels by 15-20% in the first year.
  • Improves customer satisfaction and convenience, (features like the Smart Door Unlocking System will allow employees or tenants to unlock doors by scanning four fingers with a mobile camera, making it possible to distantly control door locking and unlocking just with the use of an App). 
  • Optimizes spaces, (for example, smart features can help a building owner identify which rooms or which office spaces are most utilized and at which time of day so that resources can be allocated efficiently or even rent out empty rooms weekly)
  • Improves their wellbeing and prioritizes their safety (a factor more important than ever in a post-Covid world), 
  • Promotes better allocation and utilization of space,
  • Reduces minimal human control because so much is automated 
  • Significantly increases the property value at selling point because adoption and installation of smart technologies increases the property’s worth and will appeal to many younger clients. 

Smart Cities
It has been said that smart cities require a network of smart buildings. Cities like Barcelona, Singapore and Oslo are proving to be the first incarnations of smart cities, featuring a sophisticated level of connectivity, integrated municipal services, and stellar green energy credentials. For example, Barcelona’s pneumatic waste management system actually automates rubbish collection in some districts. But thus far, even though we are starting to see smart cities already in a nascent stage, complexity and costs have still proven to be barriers in making a city truly ‘smart’, which is why the increase of smart homes and smart buildings alongside each other is piquing considerable interest in the sector. 

In addition to all the benefits that smart buildings provide (outside of the handful of examples given earlier), smart cities will also require: 

  • Smart mobility - the promotion of bike-sharing, self-service bikes, electric vehicles, etc to offer sustainable alternatives of city travel 
  • Smart lighting - lighting optimization aims to reduce energy usage of lighting systems, such as intelligent and weather adaptive streetlights
  • Smart roads - these will detect deterioration of equipment such as traffic lights, assess the effect of traffic on the environment, and monitor traffic patterns and areas and times of heavy traffic congestion 

While this is just a glimpse at what the future of real estate is starting to look like, the inevitable adoption of smart buildings and cities comes with its share of challenges, particularly around concerns with data management. What will the IoT footprint look like in 2020 and beyond when it comes to real estate? As many benefits as it offers, what are the security complications that could arise from whole cities adopting IoT software? In the bid to make one’s city ‘smart’ and sustainable, how can awareness and transparency be communicated to all inhabitants of an area, especially when even the most tech-advanced cities have lower-income or slum areas?

For more on recent shifts in consumer behaviour, see our blog: 

Is Location Still the Top Priority for Homebuyers?

Signup for this years edition of Real Conf

With thought-leaders, digital experts and industry disruptors that will deliver first-hand insights to help you build your business, grow your market share and support your agents.

Learn more
Related post

Is Location Still The Top Priority For Homebuyers?

Are we seeing a customer shift in what homebuyers are looking for post-COVID? Is it still location or are other factors now taking top priority?
Read article

Subscribe to updates

Subscribe to our collection of expert opinions, analysis, and insights on the real estate industry with a new article every week.
By subscribing you agree to with our Privacy Policy.

Thank you!

If you wish to cancel your subscription, use the unsubscribe link in our email updates.


Something went wrong while submitting the form.
The second largest concentration of billion dollar companies per capita in the world.