Increase in outsourced FM to boost industry growth

December 12, 2016 – Outsourcing in facilities management (FM) is continuously gaining a wider traction thanks to the growing trend among businesses across sectors to reduce their overheads, while spurring their productivity, protecting their margins, and leveraging niche expertise. According to the projection of Frost & Sullivan, the global outsourced FM industry will be worth USD 1 trillion by 2025. Out of this total revenue, other studies state that the share of bundled and integrated services is forecasted to hit an impressive 35-per cent mark. The popularity of outsourced FM comes as no surprise as FM support typically lessens costs by up to 20 percent. 

Over the years, the GCC region has exhibited a notable increase in demand for outsourced FM operations, thus further cultivating the regional market’s growth and expansion. This was recently pointed out by Imdaad, a leading provider of integrated facilities management solutions in the GCC, backed by a survey conducted by the British Institute of Facilities Management on the Middle East’s FM market. The survey results showed that 36 per cent of the respondents would be solely outsourcing their FM services, while a considerable 60 per cent expect more outsourcing of FM operations in the time to come. 

Jamal Abdullah Lootah, CEO, Imdaad, said: “The public sector has lent its support to several developments that reflect its commitment to promote innovation and sustainability, and has thus cultivated stronger ties with the private sector. In fact, the UAE Government announced in February that most government tasks would be outsourced to the private sector – providing a major boost to regional and multinational service providers such as Imdaad. This is a positive mood that we are certain will drive growth in the market to ensure that the country meets its long-term goals.” 

In the UAE, the FM industry is expected to climb at a compound annual growth rate of 8.51 per cent between 2016 and 2021 due to the strong public-private partnerships in the country. The growth will be largely driven by massive projects developed in support of the country’s National Agenda set in the UAE Vision 2021. As such the projects under Abu Dhabi’s emirate-wide Vision 2030 and Dubai’s Urban Development Master Plan 2020 are particularly immense and are set to further fuel and enhance the local economies. 

In modern times, the FM market has evolved from an in-house service to a booming industry that is expected to reach USD 394 billion by 2017, per a market research report by Global Industry Analysts, Inc. In a report entitled The Future of Facility Management, released this July, it was noted that integrated facilities management (IFM) is so far the fastest growing segment.