MEFMA-Credo Report: $21.8bn spent on FM in the GCC
GCC FM Briefing 2013 will be released on Nov. 27 in Dubai
A new report commissioned by the Middle East Facility Management Association (MEFMA) has found that a total sum of $21.8bn was spent on facilities management in the GCC in 2012, with the UAE, Saudi Arabia and Qatar leading the region in terms of FM growth.
The “GCC FM Briefing 2013” report, which was conducted by Credo, a strategy consultancy to the FM sector, interviewed 35 of the region’s top companies and found that the total spend on FM is being driven by a combination of the GDP and construction expenditure.
The report also revealed that while supplier contract margins are down from a pre-recession high of 15% to about 10%, higher margin opportunities are more likely to exist in specialised sectors, like healthcare.
With respect to clients, price remains the most important factor when they choose a FM provider for themselves. Customers also remain apprehensive about the risks being tied into contracts that last longer than three years.
Alistair Stranack, director of Credo UAE, said, “We do not expect significant increases in the price of FM going forward, particularly as those interviewed indicate price is the most important factor in the purchase decision, but adopting sophisticated delivery mechanisms will protect margins and ensure the GCC FM market continues to grow at a healthy rate with support from an active and representative association.”
The GCC FM Briefing 2013 report will be released at a dedicated event sponsored by Idama and Credo on November 27 at the Novatel Hotel in the Dubai World Trade Center.
The research also compared facilities management in the Middle East with more developed markets and identified four different categories of development to protect margins – Bundling & TFM, Performance & Control, Contract Length & Investment, and Delivery.
It found that the degree of progress within these categories provides insight into how mature the market is, and that suppliers in the UAE have made most progress within Performance & Control and Bundling & TFM to date.
Ali Al Suwaidi, MEFMA board member, said: “Our collaboration with Credo has helped MEFMA highlight the value of FM in specialised sectors, the importance of innovation and integration and the advantages of longer term contracts. It is now important that we use the insights and continue to promote FM in less developed markets where the margins are still high.”