Three reasons to invest in Saudi Arabian FM

ConstructionWeekOnline rounds up the top three trends that make Saudi Arabia ripe for FM investments, as discussed with RCJY's Sultan AlKhuraissi

Investors must consider the growth prospects of FM in Saudi Arabia.
Investors must consider the growth prospects of FM in Saudi Arabia.

Consulting firm Credo announced in 2015 that Saudi Arabia's FM sector would be worth $29.1bn (SAR109.1bn) by 2017. 

Speaking to ConstructionWeekOnline at MEFMA Confex 2017, general manager for operation and maintenance (O&M) at Royal Commission for Jubail and Yanbu (RCJY), Sultan AlKhuraissi, pointed out the growth prospects of the kingdom's FM sector. 

AlKhuraissi pointed out the regional FM sector’s shifting trends, and how these will shape the Saudi industry in the near future: "I can see how good FM workshops are now getting; speakers and experts now highlight integrated systems and their benefits. The attention is on existing facilities.

VIDEO: RERA chief speaks at MEFMA Confex 2017

"As per the International Infrastructure Management Manual (2015), existing building stock represents 98% of total real estate globally, with new facilities accounting for 2% per annum.

"This will shed more attention on the role of FM and asset management," he added.

The following pages outline the top three trends emerging from Saudi Arabia's FM market and how they may attract investors.

Next page: Vision 2030 

Saudi Vision 2030 opportunities

In response to ConstructionWeekOnline’s query about government-led initiatives to boost private sector-representation in Saudi FM, the RCJY general manager said: "There’s still a need for international companies to enter the market.

"With Vision 2030, there’s a change in business and procurement strategies, and the focus is on accepting international expertise in different sectors, including FM.

READ: fmME Interview with Sultan AlKhuraissi, RCJY

"There’s a greater understanding that we need to mix local practices with international experience."

In addition, AlKhuraissi explained, a framework along the lines of the public-private partnership (PPP) model may also be introduced to further investment in Saudi’s FM sector.

Next page: PPP prospects

Room for PPP growth

"Based on Vision 2030, I think the government is aiming to go for PPPs [in the FM sector], and that could be a key area for the market to grow at competitive prices and with good quality," AlKhuraissi expressed.

"If we go for a business orientation based on public- and private-sector [collaboration], it will lead to a balance between FM demand and supply. This will be a big change that is good for us."

AlKhuraissi said such a programme should ideally help the sector migrate from input-based models to output- and performance-contracts, with owners being given room to "regulate and macro-manage" FM services.

He added: "The main driver [that could win contractors business] would have to be, for example, their experience and their understanding of our demands and customer needs.

READ: FM Expo 2017 sheds focus on technology

"I think the government might focus on PPPs – or a similar model – to make space for businesspeople and their services, while also giving them a share [in the job] and motivation to excel.

"There’s a growing acceptance in Saudi about the need for FM, and the communication gap between international and local expertise should ideally be bridged by consultants.

"Here, organisations like MEFMA and International Facility Management Association (IFMA) can also have a positive impact," AlKhuraissi added.

Next page: Market maturity

Change underway

While AlKhuraissi agreed the kingdom’s FM sector is yet to reach the same maturity level as some of its counterparts, he stated his optimism about the future.

"Both the size and [nascence] of Saudi Arabia’s FM sector should motivate foreign companies to enter the market," AlKhuraissi noted.

"This is a golden opportunity for global companies, especially since the focus is now shifting towards existing assets.

"Maintaining them requires good FM infrastructure, which means it’s a win-win situation for international firms and the Saudi government, since both would benefit from working together.

UAE: More than 600 FM professionals attend MEFMA Confex 2017

"In terms of maturity, [Saudi Arabia’s FM market] is not the same as say, Dubai’s, which is very advanced.

"However, with new strategies such as Saudi Vision 2030, there is growing understanding of how we can better our existing facilities through city management, integrated FM (IFM), total FM (TFM), and asset management.

"This learning curve is starting to develop, and I think this is one of the drivers that will [lead] Saudi Arabia to be open [to] more FM companies."











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