They are efficient, connected and cool – and construction is booming.
Ask somebody what constitutes a ‘smart home’ and they might talk about a central heating system controlled remotely by an application on a mobile phone, or a fridge that texts its owners to warn about milk approaching its ‘use by’ date.
While both of those are examples of smart home technology, they barely scratch the surface of what a smart home can entail. A universally accepted definition of the term is hard to pin down, but it is commonly understood that a smart home, as opposed to a home with one or two pieces of smart technology, is a building that utilises an ecosystem of connected devices to automate a wide range of domestic activities.
Smart TVs, speaker systems and thermostats are in the vanguard of the smart technology movement. For example, many consumers have invested in wifi-enabled heating systems that can be controlled remotely via mobile app, allowing them to turn the heating on at home when they leave the office.
A GROWING MARKET
But these are small beginnings for a market that Transparency Market Research predicts will grow to USD 21 billion in 2020 (USD 4.4 billion in 2013). To meet that target, the piecemeal adoption of individual smart home technologies will be replaced by a more systematic approach that brings automation to every aspect of home life, from entertainment and security to sustainability and comfort. Increasingly, homes will be designed and built with these smart features in mind.
David J Burns, MBE, director of UHY Saxena, UHY’s member firm in the United Arab Emirates (UAE), says that the process is already underway in Dubai and other UAE cities. The UAE smart home market is expected to grow by nearly 15% annually between 2016 and 2022.
“In Dubai, a smart home means automation of everything and control of the technology by mobile phone,” says David. “The Internet of Things (IoT) is developing at a rapid rate and nowhere more so than in Dubai. We are a hotspot here for smart home building because homes tend to be built new rather than retro-fitted, meaning smart home technology can be designed into buildings at the planning stage.”
Sean Heckford, chairman of the Middle East chapter of CoreNet Global, the association of corporate real estate professionals, identifies two main drivers behind the increasing ubiquity of smart home technology in the UAE. “Smart home solutions connected to the IoT are constantly being presented to differentiate one high-end development from another,” he says. “There is a very prevalent snobbery when it comes to gadgetry in the UAE. It is an affluent place and there is always a need to be first, biggest and best.”
But while comfort, convenience and a desire to appear more technologically savvy than your neighbours are partly pushing smart home construction, Sean thinks that another factor is even more important. “The UAE has a smart approach to buildings in general, primarily because of the correlation between smart and sustainability,” he says. “Many sustainability initiatives have been launched in Dubai over the past decade, the most recent of which being the Smart Dubai initiative. Residential developers are actively encouraged to comply with its guidelines.”
POINTS OF DIFFERENCE
The sheer quantity of new construction in the UAE makes it something of a test bed for smart home technology, and the patterns emerging in Dubai are likely to be repeated around the world. The piecemeal installation of individual smart home technologies by consumers is increasingly being matched by the systematic construction of smart homes, hotels and offices, driven by building companies wanting to add points of difference to high-end developments and governments pushing sustainability agendas.
That pattern is also discernible in the United States, another hotspot for smart home technology. In 2017, American consumers will buy more smart home systems than anybody else, and the US is also home to companies that increasingly push the boundaries of what a smart home can mean.
One such company is Fluxus, a client of UHY LLP in New York. Fluxus has created a prefabricated housing system uniquely designed to be sustainable in its production, construction and use. As one example of that, Fluxus uses just nine advanced and standardised components, each performing multiple functions.
“In the Fluxus System, passive building design principles are implemented to minimise energy use, collect renewable energy and sustainably manage water and waste,” says Fanyu Lin, Fluxus’ chief executive officer. Fluxus housing is the opposite of high-end, consumer driven smart home developments, and current target markets include post-disaster and conflict housing, affordable housing for the regeneration of failing neighbourhoods, and student housing.
But it is smart nevertheless. Fluxus housing, customised for local conditions and aesthetics, can be implemented quickly and cheaply, using advanced cloud-based computerised systems for the streamlined planning, design, construction and management of projects. The Fluxus System is also designed to smoothly incorporate other smart home technologies from the outset. “It can build homes with smart home devices, appliances, technology and infrastructure that can readily sense, understand, respond to and gradually anticipate users’ needs,” says Fanyu. She adds that the system allows for the easy incorporation of sensors that monitor and adjust heating, lighting, ventilation, water consumption and security settings.
Fluxus is an emerging company and has the support of UHY LLP. “UHY LLP in New York is playing an instrumental role in the success of Fluxus as our consultant, helping with business development, financial planning and public relations,” says Fanyu. “They provide significant value-added services and help in the successful process of establishing our company via leveraging of experiences, resources, and partnership opportunities.”
With UHY LLP’s help, Fluxus is in a position to benefit from the opportunities that the smart building boom affords. The smart home markets in Dubai and New York are clearly different, but are following a similar path. In both the US and UAE consumers are driving the uptake of gadgetry that controls entertainment systems, appliances and heating, while technology that delivers more sustainable housing is being actively encouraged by local and national authorities.
In Singapore, another smart home hotspot, this status is being driven largely by consumers demanding connected entertainment and security systems. Kelvin Lee, partner at UHY Lee Seng Chan & Co in Singapore, says, “According to our technology experts here, government incentives have made little difference to the take up of smart home technology.”
This contrasts strongly with New York, where Fluxus pilot projects and others are being supported by the New York City Economic Development Corporation, which offers tax benefits, access to financing, and assistance with the formation of strategic partnerships.
In many countries, authorities and companies are simultaneously realising that smart buildings offer long term economic benefits too. A boom in smart hotel construction in Spain is being driven by a post-financial crisis desire to cut operating costs, alongside consumer preference and government incentives.
“Without any doubt, ecology and sustainability are now on top of every agenda, as part of the social corporate responsibility strategy of companies,” says Miriam López Jadraque, national marketing director for the Spanish UHY member firm, UHY Fay & Co.
“It is clear that new norms and rules will promote sustainable developments and that hotels choose this route because, in the end, it has positive economic effects. Sustainable hotels can make major savings in water consumption and electricity use amongst others, but also gain competitive advantage. They fulfil the public demand for products manufactured or provided by companies that are socially responsible.”
UHY Fay & Co provides accountancy services for the Fuerte Hotels group, a leader in the sustainable tourism market. All the group’s new hotels are built using bio-climatic design principles, which take advantage of natural resources to reduce environmental impact. One example among many is the positioning of hotels to make the best use of natural light, significantly reducing power consumption.
New Fuerte hotels are also fitted with what the company calls ‘the robot’. According to José Luque, general manager of Fuerte Hotels group, “this is a cutting-edge software system that controls all water and energy consumed anywhere in the hotel. Thanks to this system, we can find out about energy demand levels at any given time and adjust parameters to improve efficiency.”
Like others in the business of smart buildings, José believes smart hotels offer a series of benefits. They help companies cut costs, and local and national governments meet carbon reduction targets. At the same time, they are attracting a new generation of tourists who want comfort and style but at minimal environmental cost.
“As long as the building sector is in good health there will be plenty of opportunities for the growth of smart buildings,” concludes Miriam López Jadraque. “There is a clear return on investment and those left behind risk losing competitive advantage.”
And that is perhaps the secret of the smart building boom, and one that suggests it is here to stay – driven by a perfect storm of powerful forces from technology-obsessed consumers and environmentally aware tourists, to companies and governments with long-term financial and ecological targets to meet.
For more information about UHY’s capabilities, email the UHY executive office, email@example.com or visit www.uhy.com.
Notes for Editors
UHY press contact: Dominique Maeremans on +44 20 7767 2621