FRANKFURT/ZURICH (Reuters) - Siemens on Thursday raised mid-term targets for its Smart Infrastructure (SI) business, banking on growing demand from customers to automate buildings and offices in a market expected to be worth 313 billion euros ($329 billion) by 2029.

The business, which provides systems and products to control heating, lighting and access to buildings, will now aim for a profit margin of 16-20% over the next 3-5-year cycle, Siemens said at a capital markets day for the unit in Switzerland.

"As a global technology leader in this rapidly evolving market, our Smart Infrastructure business is in a sweet spot, strategically positioned to capitalize on growth drivers," said SI's CEO and Siemens board member Matthias Rebellius.

Previously, Siemens had targeted a profit margin of 11-16% for the division, which has gained in importance in recent years as companies look to reduce the energy costs and improve the environmental footprint of their offices and factories.

Revenue for SI is expected to grow 6-9% on a comparable basis, it said, up from 4-6% in the previous time span.

"SI has been and will continue to be a key pillar of Siemens' overall success," Siemens AG's CFO Ralf Thomas said.

"With the medium-term targets announced today, we are confident that SI will continue to drive strong revenue growth, margin expansion and cash generation - not only for SI, but also for Siemens as a whole."

In its last fiscal year that ended in September, SI increased its margin to 17.3%, its highest ever level and making it the most profitable part of Siemens, overtaking the company's flagship factory automation division, which saw falling sales and profit during 2023 as China and Germany struggled.

Based in Zug, Switzerland, SI - which employs 78,500 staff globally - saw profits rise more than a fifth to 3.7 billion euros last year, driven by higher orders in the electrification business, with several large contracts won with data centres and energy customers.

($1 = 0.9522 euros)

(Reporting by Christoph Steitz and John Revill. Editing by Madeline Chambers and Mark Potter)

By Christoph Steitz and John Revill