GCC Facility Management Market Research Report: By Service (Property, Cleaning, Security, Catering, Support, Environmental Management), End User (Commercial, Industrial, Residential), Mode (In-house, Outsourced) – Industry Analysis and Growth Forecast to 2030

GCC Facility Management Market Overview

The Gulf Cooperation Council (GCC) facility management market valued $53,804.3 million in 2019, and it is projected to witness a CAGR of 10.1% during the forecast period (2020–2030). This is majorly attributed to the growing demand for facility management services in commercial and residential buildings, civil infrastructure projects, and industrial units. In addition, the facility management market is set to be driven by the various development programs being executed, such as the Saudi Vision 2030, Qatar National Vision 2030, Kuwait National Development Plan, and U.A.E. Vision 2021, in GCC countries, following the governments’ desire to fuel the growth of several sectors.

The COVID-19 pandemic has negatively impacted the GCC facility management market. This is ascribed to contractual disputes and shift in consumer behavior toward online buying, which will reduce the area occupied by physical stores. Additionally, the shrink in the facility management budget, with clients and tenants looking for lower service charges, has severely impacted the facility management market in GCC nations.

Property Is Largest Service Category due to Growing Construction Industry

In 2019, the property category accounted for the largest market size in the GCC facility management industry, on the basis of service. This was because of the increasing demand for property management services, such as heating, ventilation, & air conditioning (HVAC) maintenance and mechanical & electrical maintenance, at the newly constructed buildings in GCC countries.

Based on property service, HVAC maintenance services witnessed the highest demand in 2019. This is majorly attributed to the extreme climatic conditions in GCC countries resulting in a high dependence of buildings on HVAC systems, which is expected to fuel the demand for their maintenance in the coming years.

Commercial To Be Fastest-Growing End User Category due to Rising Demand for Commercial Properties

The commercial category, based on end user, is projected to witness the fastest growth in the GCC facility management market during the forecast period. This is attributed to the growing awareness on expenditure optimization among end users for commercial building management. Moreover, the increasing requirement for maintenance and cleaning services, for attractive and clean facilities, to attract customers/visitors, is fueling the market growth.

In-House Is Higher-Revenue-Generating Mode Category owing to High Reliability and Better Alignment with Companies’ Operations

In 2019, the in-house classification held the larger share in the mode segment. This is attributed to the advantages of the in-house employees performing their duties better and being responsible for their work. In addition, long-term financial analysis generally supports in-house facility management services, as they are considered sustainable in the long term.

Hard Services Are Largest Type Category owing to Increasing Foreign Direct Investments in Energy Management and Real Estate Sectors

Hard services accounted for the largest value share in the GCC facility management market in 2019, on the basis of type. This can be ascribed to the growing adoption of advanced hard services that require minimal staff for organizing the work atmosphere across different sectors. In addition, the entry of multinational corporations in GCC countries is fueling the demand for hard facility management services. The other major reason was the increase in the foreign direct investments in the energy management and real estate sectors, which drove the market for hard services in member countries.

Saudi Arabia — Largest Regional Market owing to Increasing Investment in Construction and Tourism Sectors

During the historical period (2014–2019), Saudi Arabia held the largest market share in GCC facility management. This is majorly attributed to the growing infrastructure and tourism sectors. In addition, an increase in the revenue from the oil and gas sector of the kingdom is fueling the industry growth, as the government is heavily investing in the development of other sectors, such as infrastructure and construction. According to the Japan External Trade Organization (JETRO), the Saudi Arabian facility management industry is likely to reach $100 billion in the next 20–25 years, with around $1 trillion worth of projects planned or under construction here.

Qatar — Most Expeditious Regional Market owing to Upcoming FIFA World Cup 2022 and Qatar Vision 2030

One of the major factors driving the market growth in Qatar is the steady development of commercial and residential properties in the country. As towers, stadiums, malls, and other structures are being constructed, the facility management market is expected to witness exponential growth in the coming years. In order to promote, educate, and empower facility management providers in the area of sustainable practices, a new initiative was launched in the country. Under this initiative, the Facility Management Interest Group was set up by the Qatar Green Building Council (QGBC) and the Middle East Facility Management Association (MEFMA), as a platform where the best practices related to facility management services can be shared. Furthermore, upcoming events, such as FIFA World Cup a020, and the Qatar Vision 2030 will be responsible for pushing the market for facility management services in this country.

Strict Regulatory Environment and Economic Development in GCC Countries Are key Market Trends

The most prominent trends in the GCC facility management market are the stringent regulatory environment and economic development. Most member countries have launched strategic plans or visions for the development of sectors other than energy, to strengthen their economies. Additionally, the increasing competition and high pressure because of the stiff regulatory requirements are compelling companies to evaluate their way of conducting business. To deal with the tight regulations and high scrutiny, organizations are looking for ways to minimize risks and manage their facilities efficiently. To achieve this, they have started employing facility management companies that can deliver and manage these services and also bear the risks associated with them.

Another Major Trend Is Outsourcing of Facility Management Services

The outsourcing of services is another major trend being witnessed in the facility management market of GCC. The demand for outsourced facility management services is increasing in GCC countries owing to the advantages it offers, such as reduced overhead costs and freedom to focus on core competencies. For instance, in 2020, Darwish Interserve Facility Management W.L.L. secured a three-year facility management contract from the Qatar Civil Aviation Authority to provide integrated facility management services, such as cleaning and mechanical, electrical, & plumbing (MEP), at the Qatar Air Traffic Control Centre.

Additionally, GCC countries have become a hub of construction activities, which has induced a high demand for maintenance services to increase the lifecycle of facilities. Thus, the market for outsourced facility management services is growing due to organizations’ need for concentrating on core business activities, instead of facility maintenance.

Increasing Construction Activities in GCC Countries and Rising Number of Green Building Projects Driving Market

The construction industry in GCC countries is expected to witness rapid growth in the coming years, attributed to the favorable economic conditions and increasing tourism activities. As part of several strategic visions, GCC member nations have allocated high budgets to the construction sector, which is providing a push to the facility management market. The countries are focusing on reducing their economic dependence on oil and gas revenue, which is one of the major factors resulting in the increasing investment in the construction sector.

The surging need for sustainable development is another among the major factors driving the growth of the facility management market, owing to the increasing efforts in member countries for reducing energy consumption. The demand for environment-friendly buildings and construction materials is increasing for a sustainable and green future. The governments of various GCC countries are extending their support to green projects to ensure minimal degradation of the environment. In addition, the unique benefits of green buildings, including the optimal utilization of natural light, highly efficient HVAC systems, and fewer volatile organic compound emissions, have pushed the demand for energy management, which has become an integral part of facility management contracts, which, in turn, is improving the growth prospects for the GCC facility management market.

Growing Tourism Industry, owing to Saudi Vision 2030, and Smart Facility Management Using Advanced Technologies Adding to Market Revenue

The travel & tourism industry is one of the major drivers for GCC countries’ economic growth. Supported by the governments’ visions, the travel, tourism, and hospitality industries of GCC countries maintained their growth trajectory despite the decrease in oil prices in 2016. The currency depreciation has affected the demand in the short run; however, the long-term outlook for the tourism industry in GCC countries remains strong. Member countries have one of the largest hotel development pipelines across the world due to the increasing demand for accommodation arising from the growing tourism industry. Furthermore, the industry contributes to the ‘Saudi Vision 2030’. The introduction of the new visa system is one of the key steps taken to attract more than 100 million annual visitors to the country by 2030. These factors will provide tremendous opportunities to facility management companies, thereby driving the growth of the facility management market.

Moreover, organizations are looking for advanced technologies for their facilities, to ensure the safety, security, and health of their employees. Smart and environment-friendly facility management services are attracting clients, as they save money, power, and other resources. Technological advancements additionally help facility management companies achieve better efficiency; therefore, the integration of technology in this field is driving the facility management market in GCC countries.

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Client Wins Are Key Market Strategy

The GCC facility management market is fragmented in nature, with the presence of players such as EMCOR Group Inc., Khidmah LLC, Interserve plc, Musanadah Facilities Management Co. Ltd., Engie Cofely, Kharafi National for Infrastructure Projects Developments Construction and Services S.A.E., United Facilities Management, Emrill Services LLC, Imdaad LLC, and Farnek Services LLC.

In recent years, players in the industry have won service contracts in order to stay ahead of their competitors. For instance:

• In April 2020, Farnek Services LLC announced the acquisition of a contract from Galadari Brothers Co. LLC. According to the agreement, Farnek Services LLC will provide security services at Galadari’s facilities located in Dubai, Abu Dhabi, Al Ain, Sharjah, and Ras Al Khaimah. Through the facilities located in these cities, Galadari operates in the automotive, printing & publishing, construction equipment, rubber product, and real estate sectors.
• In February 2020, Engie Cofely, a division of Engie S.A., acquired two contracts for facility management services. The company signed an agreement to provide computer-aided facility management services at the King Salman Energy Park (SPARK) and International Maritime Industries (IMI) in Saudi Arabia. The agreements were signed during the Aramco IKTVA Forum and Exhibition 2020.

Some Key Players in GCC Facility Management Market Are:

GCC Facility Management Market Size Breakdown by Segments

The GCC facility management market report offers comprehensive market segmentation analysis along with market estimation for the period 2014-2030.

Based on Service

• Property
  • Heating, ventilation, and air conditioning (HVAC) maintenance
  • Mechanical and electrical maintenance
• Cleaning
• Security
• Catering
• Support
• Environmental Management

Based on End User

• Commercial
• Industrial
• Residential

Based on Mode

• In-house
• Outsourced
  • Integrated
  • Bundled
  • Single

Geographical Analysis

• Saudi Arabia
• U.A.E.
• Kuwait
• Qatar
• Rest of GCC (Bahrain and Oman)