Facilities Management Market: Cutback of Operating Costs Tops the Three Principal Drivers

Press Release   •   Feb 06, 2017 19:58 IST

The global facilities management market was 28.0% occupied by the top four service providers in 2015. Amongst the top service providers which made a statement in their domestic markets, Spotless Group Limited, Bellrock Property & Facilities Management Limited, Knight Facilities Management, Arthur McKay & Co Ltd., and Quess Corp Limited are the prominent ones. Customized delivery of facilities management services and expansion of service outreach in different industries are some of the key strategies adopted by the leading players in the global market, viz. Sodexo, Inc. and ISS World Services A/S.

According to a report by Transparency Market Research (TMR), the international facilities management market is anticipated to register a double-digit CAGR of 13.6% between 2016 and 2024. In 2016, the market was valued at US$678.69 bn and is expected to reach US$1,887.19 bn by the end of the forecast period. By service type, soft services are projected to grow in quick time at a CAGR of 13.8% during the forecast period. Europe held a titanic share of US$243.55 bn in 2016 and is foretold to continue reigning the market with a US$624.95 bn share until 2024.

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Companies are taking to business expansion in various regions and establishment of subsidiaries in multiple nations in order to comprehend the demands and requirements in various industries. They are also looking to provide complete facilities management solutions by developing partnerships with leading players. Furthermore, the adoption of bundled facilities management services, integrated facilities services, total facilities management, and other service delivery systems has helped the industry players to exhibit a significant growth.

Businesses Increase Adoption for Reduction in Operating Costs

The TMR analysts have foreseen three chief drivers which are likely to propel the world facilities management market. Out of which, reduction in operating costs tops the list. This has helped to efficiently prioritize business activities and reduce excessive energy consumption costs by developing an integrated design for the operations. Prominent government regulations pertaining to carbon footprint and energy and waste management coupled with the control of harmful emissions have led to the adoption of facilities management by most organizations. Moreover, the adoption of outsourced services which helps to focus on core functions and reserve more time and resources to reexamine business strategies has augmented the demand in the global market.

Small Companies Grab Attention with Low Cost but Unorganized Services

Increasing price competition triggered by the entry of numerous small unorganized service providers which deliver services at a low cost could pose a threat to the organized firms. This has also forced the established players to lower their operating standards, precipitating the slim down of market size. However, the restraint is prophesied to be compensated by acquisitions and partnerships. Besides this, lack of skilled and appropriate manpower has increased the lead time and caused problems in the efficient execution of facilities management services. Nonetheless, this factor is expected to moderately impact the market with the presence of a host of service providers staffing certified, trained, and skilled laborers.

Cross-border mergers and acquisitions with widespread regional coverage and elevated customer network are anticipated to provide lucrative market opportunities. These opportunities are envisaged to have risen from the demand for extended reach of services and business activity across the globe. Thus, the rising cross-border presence of service providers and swelling awareness about facilities management services have provided a robust platform for the global market to thrive on.