Born through the lack of any dedicated Middle East association or body for facilities managers to work from and with to implement industry best practice, the fmME Breakfast Club gathered passionate industry thinkers and knowledge sharers to discuss hot topics and the way forward for the community as a whole. Read on and find out just what the industry is thinking...
State of the nation: so where is facilities management at in the Middle East?
Scott Wilson (SW), managing director Development, Emcor Facilities Services Group
The big issue and challenge in the UAE is the current economic climate and whether this is perceived as a threat or an opportunity. Undoubtedly cost justification and the value proposition of facilities management has come to the fore with FMs now having to prove how they add real value and are not simply considered as an additional cost by developers.
Yet innovation is born from adversity and the economic contraction has forced everybody’s hand in so much as measurement, regulation and transparency are now the buzz words in the industry. That said, we are somewhat limited as to how regulated, and therefore transparent, we can be due to the lack of any regulation and standardisation concerning, for example, service charges and energy consumption, and also the delay in strata law implementation.
Regulations need to be implemented and billing cleaned up. Full disclosure is needed.
Peter Crogan (PC), CEO BCS Strata Management Services
Yes, the contraction has hit the real estate sector pretty hard. We’re seeing a mortgage default rate of 30 percent, which is horrendous. However, the service provision arm of the real estate sector (FM) has largely been unaffected by the market’s collapse.
Why? Because of the need to maintain existing real estate assets, and the fact there is a legal responsibility to do so through strata law. It is in all of our interests to work together with the Real Estate Regulatory Authority (RERA) to deliver strata law and standardise management fees per square foot with a service charge model. Owners associations are starting to demand such transparency, they want to see where their money is being spent.
Operations and maintenance budgets are also a new concept in the UAE. The sinking fund model – whereby residents put money into a fund in the eventuality of major works – can take up to 10 years to settle, even in developed markets.
The UAEs’ is not a developed market and such funds will take time to be accepted and settle in before eventually becoming an asset in the event of major works or when an owner comes to sell further down the line.
Louisa Theobald (LT), group exhibitions director SMG FM Expo
Yes, let’s not forget the end-users here. The owners associations are the people who pay the bills and have the power to award FM contracts. But how will they know the difference between a service contract and a full management contract and the costings involved? They could be left with a decaying asset because they went for the cheapest option available.
Stephen Barker (SB), general manager ServeU
The downturn has also impacted developers. The days of a 10 year life span for buildings are gone; developers are having to factor in 10 times that now in some cases. And developers and investors have to take into account return on investment. That’s not just good for FMs and lifecycle management, it’s good for length of contract and, of course, the environmental impact of continuous construction.
Now that developers and building owners have to get a handle on what a full service FM provider can tangibly bring to the table in terms of asset managment and their bottom line, the proliferation of so called ‘FM companies’ that were no more than a cleaning outfit, are being found out to an extent because they can’t deliver.
So I perceive the contraction as an opportunity – a calm period in which we have time to implement best practice standards and realign.
Bill Heath (BH), managing director Mace Macro
We are facing a lot of issues here in the Middle East because of its rapid development, especially in Dubai.
Facilities managers need a body to work from and with to tackle the issues everybody in this room, and the industry as a whole, is talking about.
Personally I think we need to coordinate on the definition of our services, actual service charges and define service levels in accordance with best practice guidelines that I feel we should set ourselves. Dubai offers a massive opportunity to lead the way and set the bar, which other GCC countries can then follow.
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