Facilities Management Market Growth Increasing due to Demand for Reduced Operational Costs

Facilities Management Market – Snapshot

Facilities management services are widely used to support business activities. Facilities management involves management and maintenance of business processes for the effective and efficient delivery of services across all applications, creating and sustaining a safe environment for industry. Furthermore, facilities management helps companies focus on their core services and offers support which helps them in enhancing the quality of services. The market for facilities management is anticipated to quickly reach US$ 2,175.32 Bn by 2025 from US$ 678.69 Bn in 2016, recording a CAGR of 14.0%.

Demand for reduced operational costs is driving the growth of the facilities management market worldwide, as is the increasing adoption of outsourced services by industrial applications.  Delivery systems such as bundled facility management services and total facilities management services are adopted by companies to reduce costs and maintain centralized control through a complete service cycle. Adoption of facilities management services is expected to grow in the near term due to increasing awareness of facilities management services, and increasing cross-border presence of facility management service providers.

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Thus, cross-border mergers and acquisitions along with increased customer network and regional coverage can be foreseen as significant market opportunities for facilities management service providers. Economic pressure on companies is increasing due to operation and maintenance costs. In addition, companies strive to achieve reduction of capital expenditure and increased investments in core services which help drive demand for facilities management services. The increasing use of renewable energy sources to reduce the emission of greenhouse gases in manufacturing, corporate, and residential industries are driving the adoption of facilities management services across the world. As a result of the large-scale adoption of outsourced services, the facilities management market is expected to see flourishing growth.

Increasing cost of labor and the growing presence of unorganized players in the facilities management market and low-cost delivery provided by such players are hindering the growth of the facilities management market. This factor is expected to have a high impact in the short and medium term of the forecast period. Lack of availability of skilled manpower and increasing price competition are anticipated to restrict the market growth during the forecast period.

Increasing collaboration of local facilities management companies with international service providers is offering new opportunities for the facilities management market globally. Moreover, the adoption of a strategy of mergers and acquisition by key players in the facilities management market is helping facilities management service providers to understand the demand and requirements in the regions. For instance, in February 2017, Broadspectrum signed an eight-year contract with Chorus for the rollout of the Ultra-Fast Broadband Extension (UFB2) in New Zealand. In addition, these partnerships are allowing facilities management service providers extend their service portfolio and deliver customized services.

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Rising need for safety, comfort, and healthy environment of the employees as well as the increase in awareness about outsourced services among customers is responsible for the growth of the market. Service providers are focusing on expanding facility services in different industry applications around the globe. In addition, companies are providing different delivery systems such as total facilities management services and bundled facilities services through entire service applications. However, with competition from established players such as ISS World Services A/S, Broadspectrum (Australia) Pty Ltd, and others, already having a strong network in the market, new entrants may find it challenging to establish themselves without a unique value proposition.

Some of the prominent players identified in the facilities management market and profiled in the study include – Arthur McKay & Co Ltd., Bellrock Property& Facilities Management Ltd., Bilfinger HSG Facility Management GmbH, Broadspectrum (Australia) Pty Ltd., ISS World Services A/S, Knight Facilities Management, Quess Corp Ltd., Sodexo, Inc., and Spotless Group Ltd.

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