Technology is driving growth in Dubai’s FM sector
The facilities management business is growing larger each day, encompassing a wider spectrum of portfolios, with technology at its centre. Jochebed Menon finds out more
Facilities management (FM) in the Middle East and Africa (MEA) is a multimillion-dollar industry, analysts forecast the FM services market in the region to grow at a compound annual growth rate (CAGR) of 10.08% during the period 2016 to 2020.
Major players in the market reveal that demand has increased dramatically as customers realise the value FM can bring to their property, and due to the growing real estate portfolio within the region, along with increased knowledge and utilisation of professional FM services.
Another major contributor to the growth of FM is the rapid development of the region’s infrastructure sector. A report by Research and Markets says that the infrastructure sector in the Middle East is likely to grow swiftly, owing to several planned mega-scale projects.
In 2015, the value of the GCC’s total construction projects stood at $172bn. And for 2017, projects worth $2.8tn are in progress or in the planning stage, the report says.
For Waqar Mohamed, managing director facilities management at G4S UAE, demand for FM has remained strong over the past 12 months as more organisations look to expand what it means to them. “With smart technology being used to asset-manage new and large facilities, there is a whole new world out there, when the customer is searching for the answer, and often this includes the right e-solution. G4S has always had a strong mix of people and technology and it’s well-placed to offer the best of both these worlds.”
Research and Markets’ report also outlines how technology is playing a major role in reinventing FM services. “The role of technology is constantly evolving in the delivery of FM services. Vendors need to harness the power of cutting-edge technologies in delivering efficient, and time- and cost-effective services to end users. Several new technologies have embraced the FM services industry of late.
“Smart security surveillance systems, intelligent energy-saving solutions, smart building management systems, and advanced robotics are some examples of modern technology that are boosting the new level of services. These advanced communication systems have enabled optimising information, upscaling the level of operations, and enhancing services delivery to end-users.”
Mohamed adds: “The demand for asset management through e-solutions is expected to reach double-digit growth by 2020, and the number of players that can effectively deliver may reduce as a result. By next year, it’s expected that the worldwide FM outsource market will be valued at $1.314tn.”
Alex Davies, managing director of Emrill Services, adds: “The focus on technology is ever-increasing, with use of hand-held mobile technology improving productivity, and remote sensor devices increasing the data available for assets under the care of FM companies.”
Although technology is being touted as the main driver of FM services, demand across the board is growing nonetheless. Many FM companies in the region reveal that increased awareness of a wider scale across the spectrum has led to a sustained demand for FM services.
Eng Mohammed AbdulKarim Khamis, general manager of Deyaar Facilities Management, says: “Our business is increasingly focussed on the healthcare, commercial, residential, entertainment, leisure, and hospitality sectors. We are managing more hospitals, residential and commercial towers, and malls and cinemas to keep pace with [health]care needs, population increase, rising business and leisure tourism, and lifestyle demand.
Davies adds: “Emrill remains focussed on its core sectors of aviation, residential, master community, utilities, hospitality, retail, and healthcare, all of which are experiencing sustained year-on-year growth. Emrill is beginning to see a key demand trend within the energy retrofit market. To this end, Emrill Energy now has two turnkey energy projects delivering savings to end-users, without any upfront investment required by the building owners.”
G4S’s Mohamed notes that the construction sector continues to lead the way when it comes to demand for FM in the region. “Although the delivery timeline for a number of mega-projects may have been stretched out, each GCC member can point to a flagship facility that needs modern systems to manage through the building process.
“Infrastructure is still critical to places such as Qatar and even [the] UAE, so demand will remain in that area. Education and healthcare also continue to grow at pace, along with hospitality, and retail provides excellent opportunities to FM suppliers.”
With increased knowledge and understanding of why FM services are integral to maintain property value, FM operators are seeing trends that involve expanding services, a focus on quality of service, an emphasis on sustainability, and the consolidation of services.
Davies agrees: “I see the major trends being focussed on quality and service excellence; the market is starting to understand that, while cost factors are highly important in the region, it cannot be at the expense of technical ability and end-customer experience. Therefore, a shift to value-over-cost is an emerging trend.”
For Deep Reyatt, regional director, HSBC account, MENA at JLL, the significance of professional services dominates the market as developers and owners see the higher value of a well-maintained property.
He says: “As the GCC region continues to evolve, and as buildings get older, the value of having expert FM providers to de-risk and manage portfolios will become more apparent to those clients that haven’t already outsourced. Having an accurate asset lifecycle plan with that, the focus on sustainability with more attention being paid to energy efficiency, will continue to drive solutions that work for MENA, and that have a short payback period.”
Khamis feels that the role and responsibilities of FM service-providers will continue to evolve beyond just service delivery into more strategic partnerships. “Customer demands are expanding all the time. We must be equipped to offer a growing menu of ‘core’ services, as well as value-added services such as risk management, labour law counsel, and technology integration. In the UAE, demand will continue to rise for residential, commercial, and hospitality properties, as well as for major entertainment venues like [Dubai Parks and Resorts] DPR and IMG [Worlds of Adventure].”
The evolving market is giving rise to fierce competition. Khamis affirms: “Expectation levels are growing for the highest standards in property management. So, the industry has been responding to a scaling and competitive market.”
“The FM market is expected to grow at 5% this year,” Mohamed says. “Customers are becoming more demanding, as competition is at its fiercest here. The need for greater compliance means service comes at a cost.”
Khamis adds: “We need to consider challenges as opportunities. The sector is on a growth curve, regionally and globally. Services-providers need to ensure they have the right talent, properly trained, to deal with an industry scaling in both complexity and demand.”
Greater competition and stricter compliance to environment-friendly product usage, has given rise to a more sustainable path. While some see this as a chalenge, others see it as an ethical responsibility.
“Personally, I don’t see the green movement as a challenge. We have to be the stakeholders driving this change. The operation of buildings is a significant contributor to the overall impact on the environment,” says Davies.
For Mohamed, the use of only environmentally friendly chemicals and materials is now becoming not an option, but the only option. “Where there was a lack of understanding before, end-users are more aware of the benefits that lie in this, both for themselves and their environment. Through energy and carbon-efficiency and from green buildings to sustainable cities, the UAE has put its hand up as a major player.
“The increased regulation means increased risk and so merging design and maintenance is part of the consideration in order to be one step ahead. With more infrastructure construction, of course, comes more waste, and these large projects will provide challenges in managing that waste.”
Reyatt feels that the region has a lot of catching up to do when it comes to following green practices. “The Middle East is behind other regions in the overall general public knowledge of what it means to practice sustainability. Finding recycling programmes in the GCC and North African countries is not easy, and usually comes with a cost, so an organisation has to be more than just verbally committed to making the planet a greener place,” he concludes.