“Growth will be healthy in all regions, but it is the Asia region that will enjoy the most impressive rise in revenues from Occupancy Analytics over the forecast period, with predicted growth of 26.4% CAGR,” estimates our most recent report: Occupancy Analytics and In-Building Location Based Services 2017 to 2022.
Markets around the world are experiencing unprecedented growth in new office space. “More than 700 million square feet of new construction planned in the span of just 3 years”, according to Cushman & Wakefield’s Global Office Forecast. This is largely driven by emerging technologies that promise better productivity, security, efficiency and space utilization, through collecting and analyzing data streams.
One of the major technology groups within this movement is occupancy analytics. The market for occupancy analytics in commercial office space follows a similar trend to the overall commercial buildings market. Occupancy systems sales reached $1.54 Billion in 2017, and are expected to rise to $4.60 Billion by 2022, growing at a robust rate of 24.5% CAGR.
The North American market has traditionally been the strongest market in occupancy analytics and other building internet of things (BIoT) technologies, but unrelenting growth in Asian markets is expected to disrupt that. “The Asian market for Occupancy Analytics in Office Buildings is currently second to the North American market, but by 2022, we forecast it will have outpaced growth in North America to become the largest global market by 2022,” our report predicts.
The increase in Asian building technology adoption is largely driven by a strong construction sector. The concentration of emerging markets in South and Southeast Asia, alongside the economic powerhouses of China, Japan and South Korea, have created a region that is redrawing the smart building map. “Over 60% of all construction activity forecast to take place in emerging markets, up from just 35% in 2005,” according to analysis from Global Construction Perspectives and Oxford Economics.
In fact, almost 60% of the world’s new construction will be concentrated in the Asia Pacific region, with 421.5 msf of office space forecasted in 2017-2019, our report highlights. Beijing, Shenzhen, Shanghai, Manila and Bengaluru, account for as much as 55% of total construction underway in the Asia Pacific region, that’s over one third of construction worldwide. Much of this Asian construction is for commercial real estate.
“Nearly 200 msf of new office supply is expected to enter China’s four Tier-1 cities, Hong Kong and Taiwan over the next 3 years, raising the total stock in the 6 markets to 564 msf. The new projects will replace existing lower quality buildings and raise the profile of China’s Class A office market,” highlights the report.
Furthermore, this trend is expected to continue, meaning a widening gap between leading Asian markets and the rest of the world. “Emerging Asia is expected to be the fastest growing region for construction between now and 2025, followed by sub-Saharan Africa. In terms of high-rise building construction in particular, Asia dominates,” according to the Council on Tall Buildings and Urban Habitat. The council reports that of the total 107 tall buildings under construction in 2016, Asia represents 84% all completions.
Behind the construction statistics lie other trends that are indirectly influencing growth for the Asian in-building occupancy analytics market. According to McKinsey Global for example, rampant urbanization could increase the population of the Asia Pacific cities by a further 550 million people before 2030. More than 90 million people are expected to move to urban areas in Southeast Asia alone, the data shows.
The market for occupancy analytics solutions and location based services is in its infancy, highly fragmented and subject to rapid technological change. Our brand new report – Occupancy Analytics and In-Building Location Based Services – is the first comprehensive evaluation of these solutions and services in the Commercial Office space. It provides a completely up-to-date assessment of the emerging market for IoT technology platforms, and identifies the greatest potential for growth to be coming from Asia.