Innovative building approaches, which take advantage of heat energy in buildings, have recently appeared as part of a global effort to save energy. Incorporating phase change material (PCM) into the building envelope helps in reducing energy consumption and regulating energy demand by managing the thermal inertia of designed PCM thermal characteristics. A study was conducted to assess the performance benefits provided by the latent heat of the concrete wall combined with PCM. This study focuses on developing and testing heat barrier performance by incorporating PCM into wall external finishing, i.e. cement plaster and gloss paint. The effect of PCM inclusion in building wall were investigated by experimental work. The results indicate that incorporating PCM into the building wall reduced the surface temperature by up to 9 °C. Furthermore, the application of the PCM in the plaster layer is more reliable in reducing the internal wall surface temperature by a value of 8.1 °C when compared to the PCM in a painted coating. Painted wall panels experienced more significant temperature reduction differences than other wall panels, i.e. 9.2 °C and 9.5 °C, respectively. However, painted wall panels experienced higher internal surface temperatures than external surface temperatures compared to plastered wall panel at night. This could be due to the paint reactions, which are ineffective at releasing internal heat from the building at night. The yearly energy demand is decreased by 64.3% by incorporating PCM to the building wall, with a total annual electricity bill savings of 42.3% (8695.8 kWh yr−1). Therefore, it was concluded that wrapped PCM integrated into plaster layers on external surface building walls could decrease the indoor building temperature and thus contribute to conserving the energy required for an air conditioning system.