Interserve MENA chief hopeful of Saudi FM's growth
Saeed Ahmed believes Saudi Arabia's FM market will expand on the back of the country's property sector ambitions and increased awareness about the benefits of FM
Saeed Ahmed, Interserve's FM director for the MENA region, is optimistic about growth in Saudi Arabia's facilities management (FM) industry despite select market entry challenges associated with the kingdom.
Ahmed says Interserve established its Saudi operation in 2014 after a "lengthy process of finding the right partner".
He continued: "We chose a company called Rezayat Group as our partner. They’re an extremely well-established and well-known family in Saudi Arabia.
"We felt they were a good fit for us from a values point of view, and we knew they would be a very good partner for us. We set up that business towards the end of 2014."
Close to 90% of Interserve MENA’s 2017 revenue pipeline has already been secured and this year’s monetary growth could also be higher than 2016’s.
Ahmed says it is likely that a majority of this expected growth will be fuelled by Interserve’s business in the kingdom, which could also overtake the UAE as the company’s largest market this year.
He explained: "Saudi is an extremely interesting market with a huge growth profile and lots of opportunities and potential.
"Challenges revolve around cash collection, requirements for Saudisation, and changes of law. In the three years we’ve been there, we’ve seen hikes in visa costs and changes in requirements for Saudisation.
"Income tax might be implemented for expats, it was previously reported. So there are some challenges of doing business in Saudi Arabia but once you’re in, I believe its opportunities will dwarf the rest of the Middle East."
Ahmed’s confidence in Saudi’s potential as an FM hotspot is multi-faceted: the limited reach of FM in the kingdom, combined with the ambitions of its already-sizeable property market means that for Interserve FM’s MENA head, now is the right time to be a globally experienced service provider in the country.
He added: "Our business in Saudi Arabia could be larger than it is in the UAE, because the latter is clearly far more saturated than the kingdom.
"There’s a lot more competition for work in the UAE and FM is much more established here, but we’re finding growth quicker in Saudi than in the Emirates and I expect that to continue.
"If you look at the volume of projects in Saudi in comparison to the UAE, I believe the kingdom could become a larger market across the regional sector."
Ahmed says awareness about the benefits of FM will also increase as Saudi's property development market booms through projects such as the Kingdom City in Jeddah and King Abdullah Financial District in Riyadh.
"Developers in the kingdom have realised that to protect their investment, they need to maintain their facility properly and now, they’re really [acknowledging] the value of good FM," Ahmed added.
"They see that [instead of] spending a fortune on building the development and then another on updating and refurbishing it, FM can contribute to prolonging the facility’s life cycle.”
Ahmed credits the efforts of the Middle East Facility Management Association (MEFMA) and the inaugural FM Expo Saudi 2017 – hosted this January – with raising the profile of FM services in the country. This is in addition to the early adopters that have already latched on to the burgeoning market’s earliest opportunities.
"If you look at the companies that have entered Saudi FM then you’ll find many international names, and that’s because they [see] market potential.
"We’re seeing huge projects in Saudi and their scale, combined with the lack of expert FM competition and capabilities means that – while it won’t be easy – there are certainly increased opportunities for us to grow quicker there.
"Once you’re in the market and settled in, and understand its challenges, [operations] are very fruitful. It’s a nascent market, but it’s going to explode at some point and I think it’s ripe to do that very soon."