The world has changed. The once-in-a-century pandemic that we have been consumed with for the past 3-years has changed several aspects of the way we live and work. COVID has changed the way that industries operate and the way that businesses think. All this has had a transformative impact on real estate and the development of smart buildings. Armed with a more complete understanding of COVID’s effects on industry prospects, human behaviours, and end-user expectations, our latest research takes a more long-term view on the impact COVID-19 has had on the physical security market specifically.

“The shocks induced by the COVID-19 pandemic shook the operations of many businesses to their core. It upended well-established working practices and forced executives to embrace new technologies,” our research highlights. “With the spectre of COVID as a threat to human health now fading into the rear-view mirror, we will assess which of the pandemics’ effects on product innovation, market prospects and end-user expectations have been a temporary blip, and which effects will continue to impact on the market for years to come.”

During the pandemic, the physical security market has experienced many of the same workflow and supply chain disruptions that we have seen across the technology sector, however, physical security has also been active during the crisis. When lockdowns began to take hold in 2020, many of the commercial buildings left empty for months started to upgrade their security infrastructure, notably with remote monitoring systems. During the stuttered return to work, video surveillance was used to help control occupancy, enforce social distancing and mask-wearing, while thermal cameras monitored visitors’ body temperature.

“While the virus is by no means eradicated, the vast majority of restrictions and regulations introduced to slow the spread of COVID have been eased (in most countries), and organizations are now seeking to invest in technologies that have a life beyond COVID,” our new physical security study states. “Many technology adoption trends were pre-existing prior to the pandemic, but were supercharged by its effect, with companies driven to invest much sooner than they may have done otherwise.”

One of the most noticeable trends that was supercharged by the pandemic is remote and hybrid work, which is having profound impacts on commercial real estate and society at large. Companies have adopted a broad spectrum of attitudes towards flexible work and little consistency has emerged in any particular industry sectors or company types. Demand for office space is already decreasing, and with many companies locked into five- or ten-year leases that began before the start of the pandemic, we are yet to see the full impact of this shift in demand on commercial real estate markets.

Post-COVID Working Practices

A study by Savills found that Europe's average office occupancy rate during June 2022 was 43%, compared to average pre-pandemic occupancy rates of 70-75%. Results in the US, and indeed globally are similar, with an average peak occupancy rate remaining lower than 40% according to Korn Ferry Advisory. While a report by Basking.io indicates that workspace usage is not uniform across a week, with a midweek peak pattern emerging, adding another layer of complexity to workplace planning in this hybrid era.

“Hybrid working trends inevitably reduce building occupancy levels, leading many companies, both large and small, to re-evaluate their floorspace requirements as leases come up for renewal, and/or consider redesigning their physical spaces to better accommodate hybrid working practices,” our new research report explains. “Employers who are locked into long leases and facing low levels of building occupancy are exploring various means of cutting costs, including sub-letting their space, or switching off heating and power on certain floors, to save on their energy bills.”

In order to inform decision-making in this transformation, many companies have looked to smart technology for people counting, occupancy analytics, and ultimately space utilization data. This has led to growth in this segment of the smart buildings market, including physical security applications like video surveillance and access control. Using these real-time systems, offices are not just tracking busy days but busy hours, allowing them to optimize for exact space requirements. While investments in mobile and IoT cloud/infrastructure services that enable remote asset access, visualization, and control of security solutions have boomed.

Hybrid work patterns remain in transition with many companies still uncertain about their future office space requirements and hesitant to commit to major investments, but a complete reversal of hybrid working trends now seems very unlikely. Wherever buildings land on the hybrid work spectrum they are likely to depend on a range of physical security applications for their monitoring, control, and decision-making needs. While the COVID pandemic years have created some turbulence in the market, security solutions are always needed and our research shows that most industry participants remain bullish on the future.

“Analysis of world sales of physical security products at factory gate prices indicate that the market remained resilient – particularly in comparison to other industries – over the course of the pandemic,” states our latest physical security report. “Based on our analysis of available data from 2022, we project that annual revenues from the market will increase a further 9.13% percent in 2022, rising to $42.3Bn, before growth declines somewhat between 2023 and 2027, averaging around 6.5% per annum.”