As we look ahead to 2025, the intersection of technology and the built environment promises some steps closer to how we design, operate, and inhabit our spaces. In 2024, a lack of liquidity saw the industry cautiously dipping its toes into some of the tech it promised to. War, elections and lingering inflation prevented much of the progress we expected. I expect 2025 to have bolder demands with more systemic changes. Here are my four predictions for how tech will shape the built environment in the year ahead:
1. Generative AI Becomes the Backbone of Design and Operations
In 2024, many organisations explored surface-level applications of Generative AI (GenAI). In 2025, we’ll see GenAI embedded more deeply into the workflows of architecture, construction, and operations. Design teams will rely on AI not just for efficiency (like generating floor plans or clash detection) but for more strategic design decisions, such as optimisations for circularity and embodied carbon.
On the operational side, GenAI will graduate from answering “when was the fan coil unit serviced?” to mainstream predictive maintenance powered by real-time IoT data. AI will help owners identify inefficiencies, pre-empt failures, and even suggest ways to retrofit for sustainability, all at scale.
Expect to see AI as an indispensable part of every building’s digital twin, evolving from an experimental tool to a mission-critical asset. Or at least the one guarantee in marketing materials.
2. Smart Building Platforms Go Open Source
One of the biggest bottlenecks in smart building adoption has been the lack of interoperability between systems. In 2025, we’ll see major players embrace open-source platforms with greater substance. The walled-garden approach—where proprietary systems dominate—will begin to erode under pressure from clients demanding flexibility and future-proofing.
This shift to open systems will be driven by a need for seamless integration between energy management, occupancy tracking, and user experience platforms. The move to open ecosystems will also attract new talent and encourage the development of plug-and-play solutions, accelerating industry progress. The move may even allow some AI to explore how it could make our buildings better?
3. PropTech Finds Its Focus (and Profit)
The PropTech market rationalisation predicted last year is now in full swing. Many of the weaker start-ups have disappeared, while the survivors are thriving by targeting niche but profitable areas. Expect a rise in B2B PropTech solutions focused on essential functions like energy optimisation, hybrid work enablement, and tenant engagement.
With VC funding scarcer and a high cost of capital persisting, 2025 will favour PropTech companies that deliver measurable ROI. These “pragmatic PropTechs” will focus on solving clear, specific problems rather than promising moonshots. Consolidation will continue, with larger firms acquiring innovative start-ups to bolster their offerings.
4. Sustainability Metrics Become Tangible Currency
Forget vague ESG goals and blank cheques, 2025 will demand quantifiable sustainability metrics. Developers, operators, and tenants alike will face mounting pressure from regulators, investors, and end-users to prove their green credentials. Carbon accounting platforms will proliferate, providing granular insights into operational carbon, embodied carbon, and the life cycle impacts of assets.
This data-driven approach will also start to reshape leasing and valuation. Green buildings will command higher rents, while non-compliant assets risk becoming stranded. In the race to net zero, sustainability will no longer be a box-ticking exercise; it will be the cornerstone of financial and operational decision-making.
Looking Ahead
The built environment’s transformation is no longer speculative. By the end of 2025, we’ll see clear winners emerge: companies that embrace openness, focus on profitability, and prioritise sustainability. The noisy tech hype will give way to mature, integrated systems that change how we build, manage, and live in our spaces.
As we navigate this new terrain, one thing is clear: the leaders of tomorrow are those willing to adapt, collaborate, and innovate at scale.
In Dr Marson’s monthly column, he’ll be chronicling his thoughts and opinions on the latest developments, trends, and challenges in the Smart Buildings industry and the wider world of construction. Whether you’re a seasoned pro or just starting out, you’re sure to find something of interest here.
Something to share? Contact the author: column@matthewmarson.com
About the author:
Matthew Marson is an experienced leader, working at the intersection of technology, sustainability, and the built environment. He was recognised by the Royal Academy of Engineering as Young Engineer of the Year for his contributions to the global Smart Buildings industry. Having worked on some of the world’s leading smart buildings and cities projects, Matthew is a keynote speaker at international industry events related to emerging technology, net zero design and lessons from projects. He is author of The Smart Building Advantage and is published in a variety of journals, earning a doctorate in Smart Buildings.
