Is built environment technology set to take off?

For years, the built environment lagged other sectors in technology adoption. But several factors point to increased demand. Sustainability pressures, efficiency targets and new regulatory obligations are accelerating the need for digital tools across construction and property operations. The UK smart buildings market is already estimated at over £5bn and growing at a double‑digit CAGR.

Technology now touches every stage of the built‑environment lifecycle. Energy Management Systems (EMS) continue to see heightened demand as organisations pursue net‑zero strategies and attempt to offset energy volatility; the UK EMS market alone is valued at over £800m. Digital twins and rich geospatial datasets are enabling more accurate planning, modelling and operational insights, while compliance and maintenance platforms are becoming essential tools for meeting “golden thread” expectations and tightening regulatory oversight.

Despite this momentum, investors must navigate a series of nuanced challenges. Adoption may be rising, but many end users remain cost‑constrained, particularly in public sector estates. The key question: does positive sentiment translate into real, timely buying behaviour, or will spend be reprioritised toward more immediate operational needs?

Market structure presents another layer of complexity. Value capture differs substantially between manufacturers, integrators, installers and service providers, each with distinct margin profiles and levels of stickiness. Meanwhile, competition is intensifying. Large incumbents increasingly offer integrated, end‑to‑end solutions, leaving smaller niche players to prove they have a clearly defensible right to win—whether through vertical specialisation, superior data, or differentiated service models.

Overall, Armstrong expects to see opportunities in built environment tech over the next year, but these opportunities are likely to have knotty questions, which need to be ironed out before investors can proceed with confidence.

To discuss any of these themes in more detail, please contact:

Matt McNally

mmcnally@armstrong-ts.com
+44 7894 736 523