Building Automation System Market Expected to Grow to USD$121.5B by 2024
The building automation system (BAS) market is one of the fastest growing product types in the commercial real estate industry. The industry is expected to grow from $75B in 2019 to $121.5B by 2024 at a 10.1% compounded annual growth rate (CAGR). CAGR is the rate of return required for an investment to grow from its beginning balance to its ending balance, as profits are reinvested at the end of each year of the investment’s lifespan.
Understanding CAGR is important because it’s particularly useful for comparing varying revenue growth of companies in the same industry. CAGR movement also closely relates to individual properties’ Net Operating Income (NOI). For investment properties, the NOI—in conjunction with the capitalization rate—determines the property’s value, and in turn influences the industry’s CAGR.
“The rise in the adoption of automated security systems in buildings, development of wireless protocols and wireless sensor network technology for BAS, and rapid penetration of IoT in building automation systems are the critical factors driving the growth of the BAS market.” Other factors include increasing energy conservation awareness and government initiatives supporting BAS adoption.
While North America captured the largest share of the BAS market in 2018, the BAS market in Asia Pacific is expected to grow at the highest CAGR in the next five years. Especially as the construction industry continues to expand rapidly in the region, along with more government initiatives towards energy conservation and smart cities development.
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