Equipment rental finds takers in UAE FM market
fmME speaks to industry experts about whether – and which – equipment should be rented or purchased in the new year
The GCC’s property markets are charting a course to recovery after 2016’s quietude due to low oil prices and, it appears, construction activity will also shift gears in the months to come. All signs point towards a busy 12 months for the region’s FM providers and as annual budgets are finalised this month, it is worth examining how equipment investments can be maximised by FM teams in the upcoming year.
The equipment rental segment is on a high in the Middle East, driven by demand from the local construction and FM sectors. As regional operator outfits grapple with reduced fluidity in the aftermath of last year’s low oil prices, equipment rental options – a combination of machines, technical knowhow, and safety credentials – are gaining traction with FM operators.
Among them is high-access cleaning specialist Grako’s managing partner, Alain El Tawil, who tells fmME that his firm’s preference for rental is spurred by numerous factors, such as equipment quality, price, and project needs. In any given month, he reveals, Grako has up to 12 machines operating across various sites in the country.
He continues: “Whether we purchase or rent depends on the project, because every machine has a certain height and weight, uses diesel or electric power, and can be used for indoor or outdoor applications.
“Every site in the UAE, with its architectural specialties, requires a different kind of machine. So [we need to ask ourselves] if it makes sense to buy a machine and move it around. Any given machine might be suitable for use on three out of 30 sites, so it makes more sense to rent than buy.”
Additional factors that contribute to the buying decision, El Tawil explains, include the maneuverability of the machine, especially if the unit must pass through doors for indoor works.
“Another reason we like to rent is maintenance. Machines do break down and when that happens, then the supplier must – ideally within an hour – get to wherever the machine is,” El Tawil continues, citing facility requirements like daily operational hours as critical factors in such cases.
“Secondly, if a machine I own breaks down then the cost implications on me are huge. The repair process – including the equipment manufacturer collecting the unit, getting spare parts, repairing it, and returning it – means I lose days of work.
“This means I’m impacted financially and from a customer satisfaction perspective as well. In a rental arrangement, the unit would only get replaced and work would proceed as scheduled.”
Equipment selection is a crucial cost investment regardless of the procurement model in place – more so in the FM sector, where the wrong piece of equipment could dirty or damage a facility’s interiors.
“Bigger machines don’t always come with non-marking tyres, so we cover them with a guard to ensure the property is not impacted,” El Tawil explains.
“It’s a time-consuming process, but it’s our responsibility to ensure the tyres don’t dirty the property, because that’s an additional cost for the client.
“We prefer to rent because of the cost-savings too. If you buy equipment, then you’re using up a huge amount of money upfront; any bank loans taken for the purchase would come with an interest rate; equipment maintenance, storage, and transportation costs must also be considered.
“Broadly speaking, equipment purchase might lead to a 2% saving over rental, but the latter is hassle-free and more economical when project [portfolios] are varied,” El Tawil adds.
While large equipment such as access machines, scaffolding, and even building maintenance units appear to be best rented than bought, certain equipment relevant to the FM market makes more sense as a one-time purchase, Srinivasa Murthy, sales and marketing manager at Naser Al Sayer & Co (NASCO), tells fmME. NASCO is the authorised agent in the UAE for Makita Gulf, the regional arm of the Japanese power tools manufacturer Makita Corporation.
The company’s products are vastly popular across the country’s joinery and landscaping segments, in addition to the construction sector, Murthy says. Its extensive portfolio includes garden tools such as blowers, lawn mowers, and high-pressure cleaners, as well as laser tools, dust extraction machines, and power drills.
Murthy says most of the company’s products are purchased rather than rented, “due to the frequency of their use and the relatively low capital investment they require”.
He concludes: “These products are used regularly – almost daily – by operators, so rental procurement would be a loss for the company.”