Growth Potential

fmME chats with three players in Kuwait's FM market

Kuwait City
Kuwait City

fmME chats with three players in Kuwait’s FM market to find out how the sector is doing there, and what one can expect from it in the future

A recent Middle East Facility Management Association (MEFMA) commissioned report on the FM sector in the GCC asked 35 market participants their views on which countries in the region would experience the fastest FM market growth. While the UAE, Saudi Arabia and Qatar ranked high on this survey, respondents didn’t seem to feel the same way about Kuwait.

But that’s not to say that the FM sector in Kuwait doesn’t have a future ahead of it. On the contrary, the same report notes that the FM market in Kuwait, while relatively smaller as compared to some other GCC nations, still has a high potential for growth.

Given the forecasts for GDP growth and construction growth in the country, the total spend on FM in Kuwait remains a significant amount that’s worth taking note of.

Of course, the best people to comment on the state of the FM industry in Kuwait are those that actually work in the country. Ahmed Yousef Al Kandari is the CEO of United Facilities Management (UFM), one of the nation’s leading providers of integrated FM services in the fields of property and facilities management.

Besides its activities in Kuwait, UFM has a presence in Oman and Jordan, and is now looking to expand into Qatar and the UAE as well.

“The FM industry is still in its early stage of maturity in Kuwait,” Al Kandari says. “I believe that real estate owners and government officials are becoming increasingly aware of the added value to their assets due to the adoption of comprehensive and fully integrated service platforms delivering all facility management services, and not to have each service delivered through different companies.”

“This is an important step, for it opens the road to professional FM companies to deliver integrated services,” Al Kandari continues. “Looking ahead, I definitely see a prosperous future for the FM industry in Kuwait. We are witnessing an increase in requests for integrated services from mid to large-size projects.”

Refaat Zaki, senior operations manager, facilities management – institutional & commercial, at Kharafi National, agrees with Al Kandari’s assessment of the FM sector in Kuwait.

Kharafi National is another of Kuwait’s leading FM providers, with the company having a history dating back to 1978. Zaki, as the head of all FM operations at Kharafi National, has been responsible for the growth of its FM business.

“The FM industry in Kuwait is already at a relatively advanced stage, yet there is still a big space for improvement to happen,” Zaki says.

“The biggest challenge facing FM service providers in the region is the lack of awareness of the benefits from having these services. While multinational clients are familiar with FM culture and the value it adds, locally based companies still hesitate to get on board.”

Tom Gilmartin, general manager, Ecovert FM Kuwait (EFMK), feels similarly about the market in Kuwait.

EFMK is a fairly recent entrant to the market—established in 2007, EFMK consists of local partners Ahmadiah and Ajial Real Estate, and international partner Bouygues Energies & Services. Gilmartin admits that given the immaturity of the FM industry in Kuwait, establishing an FM company here has been a challenge.

“FM in Kuwait is not as advanced as that in the UAE,” Gilmartin says. “Generally, the approach here is still to source single service providers, employing their own in-house management to oversee building operations. Although this trend is still being adopted, the level of understanding of FM and its benefits has increased tremendously in the country.”

According to Gilmartin, this increased awareness of FM is helping spur the Kuwaiti market forward.

This has been best displayed in the case of new developments in the country, with their level of sophistication requiring their owners to plan ahead and decide how they want to protect their assets and investment. With government ministries also exploring FM now, the sector seems set for further development.

“As the FM market matures, I would hope that more international FM companies will come to Kuwait,” Gilmartin says. “Although this will increase competition, I believe this will have a positive impact. In turn, this will increase the number of opportunities, and [encourage clients to] move away from the traditional single service providers.”

Al Kandari notes that another issue hounding the delivery of FM services in Kuwait is the model that is being used to do just that. “The current approach is discrete and fragmented,” he explains.

“Each service is delivered as a silo, completely separate from other FM services. Such an approach creates inefficiency, as well as a reduction in overall quality.”

“Real estate developers are yet to place strategic value to facilities management at design phase,” Al Kandari adds. “Maintaining, cleaning and securing the built environment, for instance, have always been an afterthought. Obviously, that creates major challenges to both the real estate developers as well as the service providers during the operational phase.”

Since it offers a one-stop shop for quality design, operation and maintenance, Zaki says that an integrated FM service provides clients with the advantage of having a single point of contact for all of the operations.

This allows clients to concentrate on their respective core businesses, aided by the knowledge that their facilities are being managed by an experienced and qualified professional team.

Increasing awareness about FM has therefore become a priority for FM service providers operating in Kuwait. In March of last year, all three companies—UFM, Kharafi National and EFMK—played significant roles in MEFMA’s first “Awareness into FM” conference in Kuwait, which was focused around the theme, ‘Buildings and Facilities: Assets to be Valued.”

More than 170 delegates attended the event, with the turnout including owners, developers, engineers, and, of course, FM professionals.

While this gathering can be considered to be indicative of the interest in the FM sector from players in the real estate arena, Al Kandari notes that the changing needs of tenants themselves are also encouraging the wider adoption of integrated FM services.

“Tenants continue to demand more of the built environment in terms of services, environment and sustainability requirements,” Al Kandari explains. “Real estate owners need to address such trends, and respond to them. As a result, we are confident that the integrated concept in facility management will continue to expand within the Kuwaiti market.”

With respect to plans for the future, Zaki says that his company will continue to make it a priority to spread awareness.

“As an FM pioneer in Kuwait and a founding member of MEFMA, Kharafi National will keep leading the market by continuing to spread FM awareness across the country and the region,” Zaki says. “Our FM business line is expected to continue its steady growth in projects, covering additional segments such as banking, education, hospitality and healthcare.”

Gilmartin also foresees a good time ahead for his company. “EFMK already has a number of potential projects in the pipeline, and we hope to secure the new business in the first quarter of 2014,” he says.

“We expect another great year, forecasting a further 22% growth, without taking our focus off our existing clients. Our aim is to maintain our progress by further developing our in-house capability, expanding our scope of services and strengthening our brand.”

Client File: UFM
United Facilities Management (UFM) currently manages over 600,000 square meters of property in Kuwait and the Sultanate of Oman. The company has experience in properties ranging from skyscrapers, office buildings, malls and multi-use projects to hotels and resorts in both the public and private sectors.

Some of UFM’s major projects include KIPCO tower, Marina World and Salalah Gardens Mall. UFM also provides cleaning and security services to almost 40 clients all over Kuwait, including major government facilities such as the Ministry of Social Affairs & Labour.

client File: Kharafi National
Kharafi National manages a variety of high end and prestigious projects in Kuwait like Amiri Diwan Seif and Bayan palaces, Amiri VVIP airport terminal lounge, the first phases of the landmark Avenues Mall, the Kuwait Scientific Center and other commercial and residential developments.

Client File: EFMK
Ecovert FM Kuwait’s (EFMK) business portfolio consists of projects such as KIPCO Tower, GUST University, Bayt Abdullah Children’s Hospice, Al Omooma Hospital, KNPC, Honda, Ajial Mall, Al Hamra Business Tower & Luxury Shopping Center amongst others.

The diversity of their client base includes retail, education, commercial, healthcare, residential, automotive and government sectors. EFMK also continues to provide project works and consultancy services across the MENA Region in Kuwait, Qatar, Oman, Lebanon with further opportunities being developed in the Kingdom of Saudi Arabia and Kurdistan.

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