Beyond bricks: 5 companies helping to make buildings smarter and greener

Against the current economic backdrop, the commercial real estate sector is grappling with a series of challenges — a rise in inflation, escalating energy costs, and a steady uptick in operational expenses. 

On top of this, these buildings also have to meet ever more stringent environmental standards that contribute to climate goals. This is further intensified by the Minimum Energy Efficiency Standards regulation in England and Wales, which states that from April 2030 all commercial buildings must be made efficient enough to meet or exceed a B class energy rating. If nothing changes currently, 2 out of 3 of London’s commercial properties might become valueless if they aren't upgraded to become more energy efficient. 

With these challenges in mind, smart buildings emerge as a neat solution. Smart buildings are technologically advanced structures that use a range of technologies, including the Internet of Things (IoT), artificial intelligence, automation, and digitisation, to enhance their functionality, efficiency, and user experience. Importantly, smart buildings rely heavily on data - sourced from a variety of sensors and devices integrated within the building - in order to operate. 

For the most part, a smart building’s operating infrastructure is connected to one large network to improve the performance of the building and occupant experience. This means lower capital and operating costs for the building owner and better environmental credentials for the building. 

The software underpinning smart buildings can be readily used across a range of different sectors, including retail, healthcare, construction, and corporate office spaces, all with the common aim of optimising resource usage and reducing costs. 

In an industry driven by circumstances where seconds count, interconnected sensors and real-time data in hospitals are crucial. By effectively managing the data available, hospitals can run operations more efficiently, which is particularly crucial in light of the efficiency-driven reforms being made in the NHS. 

In retail spaces, companies use data analytics to tailor customer experiences, track and monitor assets, alongside integrate systems and data. For example, using software to integrate indoor positioning sensors, lighting systems, IT networks, and security systems all allow for increased efficiencies in retail spaces. 

With regard to office spaces, employee salaries, and benefits typically make up 90% of an organisation’s budget, and so small improvements in staff performance - improved by optimum conditions such as lighting and temperature - can have a big financial impact and will outweigh higher construction or occupation costs. For example, research from the World Green Building Council showed that improved lighting conditions - such as natural light and adjustable artificial lighting - can increase productivity by up to 23%, by reducing eye strain, boosting mood, and enhancing alertness. 

Software can be used to assist smart buildings throughout the whole of their ‘lifecycle’, including as early on as planning, designing and construction. Companies using this software can make more informed decisions, and identify the most cost-saving approach, for example, tracking material usage and waste, which ultimately reduces wastage during the construction process. 

Smart buildings make financial sense, but these buildings also immensely contribute to climate targets. Today, buildings account for 30% of global carbon emissions linked to energy use. Among these emissions, 28% stem from day-to-day operations, including the energy used for heating, cooling, and powering these buildings. Additionally, 11% of these emissions come from the materials used and from construction processes. With this in mind, smart buildings are in a unique position to drive change.

The global smart building market is valued at around $108 billion today and is expected to reach $538.45 billion by 2030. The aforementioned emphasis on sustainability, along with government regulations, cost saving benefits, improved operational efficiencies and enhanced occupant experience all underpin the huge growth trajectory of the market. Here, we bring 5 companies to attention that are driving forth the smart buildings shift with their leading and cutting-edge software. 

Crimson Tide 

Crimson Tide(TIDE)Follow | TIDE is a software company that provides mpro5, a software platform that delivers mobile workforce solutions for businesses. It helps businesses manage tasks and workflows, track assets and equipment, ensure compliance with regulations, and provide real-time reporting and analytics. The platform also enables better communication and collaboration between team members. 

This year, Crimson has been expanding its footprint in the US, signing a 3-year contract worth £0.25m in February. The contract will see mpro5 implemented in a building-wide IoT project in the customer's offices in San Francisco. Specifically, mpro5 will be used to initiate smart actions from sensor readings in the customer's offices, which will be the first wider implementation of mpro5 in the US. 

In the UK, Crimson has secured two contracts with NHS facilities this year. In April, the company announced the initial contract win with the NHS Trust in the South East of England for c.£250k, whereby the implementation of mpro5 would drive efficiencies and savings across the Trust's estates.

Shortly after, Crimson won an additional 3-year contract with the NHS in May to add Internet of Things (IoT) sensors, taking the full contract value to over £0.5m.

On the financial front, Crimson’s ‘land and expand’ strategy - in essence, upselling to existing customers - saw annualised recurring revenues increase by 51% in 2022 to £5.75m.

Checkit 

Checkit(CKT) Follow | CKT, is a UK-based company that provides solutions for improving operational efficiency and compliance across various industries. They offer a range of software, hardware, and monitoring systems designed to streamline tasks, enhance productivity, and ensure regulatory adherence.

Checkit's solutions have been used across sectors such as healthcare, hospitality, retail, and facilities management to improve processes, maintain quality standards, and achieve better overall performance.

Checkit’s technology has been employed by high-profile names in the UK, including Waitrose and John Lewis. With a partnership spanning 24 years, Checkit’s monitoring solutions have enabled 357 Waitrose branches and 38 John Lewis stores to protect against loss of stock, reduce engineering call-outs, boost energy-saving initiatives and ensure continuity. All of these have provided immense cost savings, including saving £600k on reduced engineering callouts, £650k on reduced maintenance costs, and a staggering £1.5m on energy savings. 

This month, Checkit announced the renewal of its Framework Agreement with John Lewis for a further period of three years, taking the total contract value to £6m. 

Financially, annualised recurring revenues were up 24% to £12.6m, led by sales in the US, in the six months to 31 July 2023, with total group revenue bumped up 19% to £5.7m. Net cash was down slightly in the period - from £15.6m to £12.8m - a result of continued investment, including sales and marketing. 

Smartspace 

Smartspace (SMRT)Follow | SMRT offers tools and technology aimed at helping companies better manage their office operations, and improve overall efficiency. 

The software specialist has a broad range of services that make offices run more smoothly, particularly crucial in the aftermath of Covid-19 as companies look to drive real estate costs down. These include desk and room booking systems, visitor management, and space utilisation analytics, which fall under the operating brands SwipedOn and Space Connect. 

In recent news, Smartspace refocused its efforts to become a pure software business, selling its hardware-based Anders + Kern division in July with net cash of approximately £1.1m. The company’s pure focus on software services should see Smartspace able to scale quickly and expand its overall global reach. 

Executing its software focus, SmartSpace launched SwipedOn's SaaS visitor management platform in Taiwan, China and Germany in April 2023, broadening the addressable market for SwipedOn, and growing the customer base of non-English speaking clients. This follows on from last year's initial launch in Asia through South Korea, and underscores Smartspace's efforts in expanding its international presence.

In September 2023, SmartSpace announced it had expanded its SwipedOn platform to allow desk booking, car park space booking, along with EV charging point and equipment bookings. The move transitions SwipedOn from a point solution with a focus on visitor management into a comprehensive workplace management platform, providing a key opportunity for revenue expansion.

In its latest trading update, Smartspace said revenue is expected at £2.7 million, up 15% year-on-year, with annual recurring revenue also showing strong growth, up 21% to £5.8 million. Cash balance stands at £2.2 million.

Eleco 

Eleco (ELCO)Follow | ELCO is an AIM-listed specialist software provider for construction companies that are helping to construct, refurbish, or ‘fit-out’ commercial properties. 

Its software has been used for high profile projects such as the V&A Museum in London UK, Warsaw Metro Extension in Poland and Oxford University’s Beecroft physics building in the UK, and is becoming increasingly important in ensuring that new buildings meet ever-more stringent environmental regulations.

This year, Eleco has been making huge strides in its SaaS transition, acquiring BestOutcome in June, a UK-based provider of project portfolio management software, for up to £5.3m. This move is expected to bump up annualised recurring revenue and earnings in 2023, while also strengthening its Building Lifecycle portfolio. 

In another move to streamline focus on the business, Eleco sold its subsidiary Eleco Software this year to Austrian architectural software company FirstInVision GesmbH for €600,000. This move aligns with Eleco's strategy to concentrate on its main customer sectors and ventures while allowing the company to allocate resources to other areas and acquisitions.

Financially, Eleco said in its latest trading statement that total revenues for the period are expected to be around £13.5m, coming in marginally higher than the £13.4m it delivered in H1 2022. More importantly, its SaaS transition has driven recurring revenue to 72% of group revenue from 64% in FY22. Annualised recurring revenues increased 18% to £19.7m, up from £16.7m in the same period last year.

Kinovo 

Kinovo(KINO)Follow | KINO is a provider of specialist property services to aid in safety and regulatory compliance, building construction, conversation and maintenance, along with providing efficient and greener energy alternatives to drive down a building's carbon footprint. 

Its customer base is dominated by relationships with Local Authorities and Housing Associations, servicing the social and affordable housing sector but also include public buildings and education, as well as the commercial and private sector.

Recently, Kinovo underwent a strategic repositioning to focus its efforts on Regulation, Regeneration and Renewables, which sit in line with long-term macro-economic drivers of its customers, supported by government policies.

2023 has seen a stream of contract wins for Kinovo, with notable examples including the company securing a £12 million contract over five years from The Hyde Group In February. The Hyde Group is a major UK housing and care provider with 50,000 accommodation units and over 100,000 residents, with Kinovo employed to carry out electrical testing and related services for both their residential and communal properties.

Shortly before, Kinovo announced it had been awarded a contract worth £4 million over two years by the London Borough of Waltham Forest and, together with the Hyde win, this will contribute to Kinovo's three-year visible revenues.

Financially, Kinovo's FY22 revenues increased 18% to £62.7m, with a 29% rise in Adjusted EBITDA to £5.5m and a 58% jump in pretax profit to £4.4m. Net cash turned positive, going from a net debt of £0.3m to £1.1m, post an early £2.5m HSBC loan repayment.