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GCC Facility Management Market Overview
The GCC facility management market is estimated to attain a size of $40,210.5 million in 2017 and is projected to witness a CAGR of 10.7% during 2018-2023. The growing application of facility management in commercial buildings, residential construction projects, infrastructure projects, and industrial projects is driving the growth of the market in GCC countries.
GCC FACILITY MANAGEMENT MARKET, BY SERVICE, $M (2013 - 2023)
The GCC facility management market is steadily catching up with the global market in terms of growth, and is creating immense opportunities for local and international players.
The market in GCC countries is set to see growth as various projects are underway, following the governments’ strategic moves to fuel the growth of the sector. For example, Saudi Vision 2030 Plan, Qatar National Vision 2030, Kuwait National Development Plan, U.A.E. Vision 2021, and others are the major socio- economic plans being undertaken in the respective GCC countries. Also, the upcoming mega events in these countries such as Dubai Expo 2020 and FIFA World Cup 2022 (to be held in Qatar) are providing room for the growth of the GCC facility management market.
On the basis of service, the GCC facility management market is segmented into property services, cleaning services, security services, catering services, support services, environmental management services, and other services. The other services include reception staffing, utility management, furniture supplies, and contract management. Of these, cleaning services is expected to be the fastest growing category during the forecast period.
GCC Facility Management Market Dynamics
Regulatory and economic development is the key trend observed in the GCC facility management market.
The major trend observed in the GCC facility management market is regulatory and economic development in GCC countries. Most of the GCC countries have introduced strategic and economic plans or visions for the development of sectors other than energy, to strengthen their economies. The increasing competition and high economic pressure related to regulatory requirements are compelling companies to evaluate their way of conducting business. Also, increasing pressure from health and regulatory bodies regarding regulatory compliances is pressuring companies to maintain their facilities as per the laid guidelines.
Additionally, to deal with tight regulations and high scrutiny, companies are looking out for ways to minimize risks and manage their facilities efficiently. To achieve this, companies started partnering with facility management companies that can deliver and manage these services and can also bear the risk associated with it. By this, companies aim to protect the investment that has been made in facility assets, focus on their core competencies, and minimize interruptions in their core businesses.
The increasing construction activities in GCC countries, increasing green building projects, growing tourism industry, and smart management of facilities using advanced technology are the major drivers expected to propel the growth of the GCC facility management market.
GCC countries have been experiencing a significant increase in construction activities in the last few years. As part of the strategic vision, the GCC member nations have allocated high budget to the construction sector, which is providing a push to the facility management market in GCC countries. The countries are focusing on reducing their economic dependency on oil and gas revenues, which is one of the major factors resulting in increased investment in construction. By the end of 2017, the estimated value of the total urban construction contracts was estimated to be $50.9 billion (AED 186.8 billion) in GCC countries. Some of the major upcoming/ongoing projects in GCC countries are Deira Island Mall in Dubai, City-Centre – Al Zahia in Sharjah, Danat Al Lawzi in Bahrain, and various others. Thus, increasing construction activities will have a positive impact on the growth of the market in GCC countries.
Low awareness regarding the facility management industry among end users is the major restraint in the GCC facility management market. Many end users are still not aware about the concept of these services or have not opened up to the concept of outsourcing these services. Organization are not aware about the concept of facility management or the advantages it offers, and still consider it as an overhead cost instead of a value adding function. Also, almost all GCC countries face high inflation and are struggling to contain costs. Companies tend to refrain from long term service contracts related to outsourcing activities and are not open for price escalation clause in contracts, which is making it even tougher for firms to retain their margins.
GCC Facility Management Market Competitive Landscape
Some of the major players operating in the facility management industry are EMCOR Group Inc., Khidmah LLC, Interserve plc, Musanadah Facilities Management Co. Ltd., Emrill Services LLC., Cofely Besix Facility Management, Imdaad LLC, Farnek Services LLC, United Facilities Management, and Kharafi National.