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FACILITIES MANAGEMENT IN THE UAE MOVES INTO THE FAST LANE

FM IN THE UAE MOVES INTO THE FAST LANE

February 2016

Backed by a decade of robust growth, the UAE’s facilities management industry is now well-positioned to support the nation’s ambitions for a sustainable built environment

The story goes: once upon a time, in an office long ago, a light bulb went out. The man sitting under the bulb, the president of the company, did not have the time to change the bulb himself. So he called someone from downstairs to fix it. And so, the facilities management industry was born. An anecdote, obviously, but not too far from the truth.

Today, facilities management (FM) has gone from being an in-house service to what is projected to be an industry worth USD 394.69 billion by 2017, as per a market research report by Global Industry Analysts, Inc.

Closer to home, the FM industry may well be in its infancy in the Middle East, especially when held up against mature markets such as Europe and North America. But it is now growing at a somewhat unforeseen, incredible pace; recently, industry estimates put the cumulative spend on FM in the GCC at USD 892 billion over the last 25 years, with Saudi Arabia, Qatar and the UAE leading the spend.

Going forward, FM service contracts in the UAE alone are expected to be worth USD 5.4 billion (close to AED 20 billion) per annum by the end of 2015, as per security solutions firm G4S.

In 2005, industry estimates put the value of the UAE’s FM industry at AED 2.5 billion; essentially, the last decade has equaled a ten-fold growth for the nation’s FM industry.

A DECADE OF GROWTH

Commenting on the nature of this significant growth, Bill Heath, Chairman of Macro International, says: “The FM industry is in different stages of development across the GCC, with the UAE’s perhaps being the most advanced – here, the FM industry has evolved from being a reactive one to one that considers energy efficiency, and recognises the need for planned preventative maintenance.”

The concept of planned preventative maintenance provides for the effective management of building elements such as the roof, lifts, and air-conditioning and heating systems, the fixing of which can prove expensive upon failure.

Heath credits this shift in understanding to the 2008-2009 financial recession: “One of the main catalysts for this change in thinking was the financial downturn, when existing and new projects came to a halt, and the focus shifted to looking after buildings, spurred by the realisation that they would need to last longer than a few years.”

Jason Ruehland, Managing Director at Emrill, agrees: “A majority of the UAE’s properties are coming of age, and buildings are still operating with systems and equipment that are 10 to 15 years old. These systems are inefficient in their consumption of energy and energy costs have been rising year-on-year. The recession left a lot of properties without cash reserves to carry out retrofit programmes to reduce energy consumption and operating costs.”

Over the past decade, the FM sector has not only grown in size but also in scope, with companies growing from small, specialised entities to large, multifaceted corporations. FM providers now offer a whole gamut of services including housekeeping, security, technical support, concierge, pest control and CCTV.

“FM is seen as an expensive overhead that doesn’t really generate income for most companies. Outsourcing FM helps them reduce liabilities. Companies that use competitive tendering can unlock significant savings and implement innovations that they wouldn’t be willing to develop themselves,” Ruehland adds.

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