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GCC facilities management sector worth $4.8 billion

DUBAI — The multitudes of modern skyscrapers, man-made islands and mega projects in the GCC have resulted in an unprecedented growth in the region's construction sector.

This flurry of construction activities in turn has spawned the need for top-end benchmarks to ensure the sustainability of these buildings that need continuous maintenance thereby creating demand for the facilities management (FM) industry.

"The total facilities management industry in the Middle East is set to grow and become a very lucrative market," according to Chris Fountain, Event Director of UK's CMPi, organisers of Working Buildings Middle East, which is scheduled to take place at the Abu Dhabi National Exhibition Centre from December 10 to 12.

Fountain noted that the market size for the outsourced facilities management sector in the GCC countries (excluding Saudi Arabia) stood at Dh17.72 billion ($4.83 billion) in 2006 and is poised to grow by 15.3 per cent from 2006 to 2012, reaching approximately Dh36.7 billion ($10 billion) by 2012.

"The outsourced facilities management market includes all revenues derived from total facilities management contracts, single service and bundled service contracts," remarked Fountain.

From this outsourced facilities management market, the total facilities management market size was $200 million as of 2006, growing by 19.3 per cent in the forecast period (2006-2012) and is expected to exceed $575 million by 2012.

Total facilities management market revenues include contracts from an integrated package of at least two service types, and exclude single-service or bundled service contracts. Bundled Service contracts include different service types that all fall within one of the main service categories. For example, cleaning and catering are both support services.

Mechanical, electrical and plumbing (mep) is the most in-demand service, as evidenced by the proliferation of MEP companies in the region. Cleaning and security are also well-established. In combination with MEP, these services form the common bundle to customers and are the most frequent services to be included in a total facilities management contract.

The United Arab Emirates accounts for nearly 66 per cent of total facilities management market revenue share and has the strongest growth rate in the region. Dubai, in particular, is now recognised as a global tourist destination, shopping hub and home to some of the world's biggest mega projects.

The total facilities management concept became a buzzword in Dubai some three years ago. Eager to exploit these opportunities, well known global TFM companies set up offices in Dubai. As a result, the emirate now has the most advanced Total Facilities Management sector in the region. A close second is Abu Dhabi. Its ambitious tourism targets are attracting the top-end hotels, along with recreational and cultural facilities.

Compared with Dubai, Abu Dhabi has well-planned development projects, all of which offer long-term potential for total facilities management companies.

At 17 per cent share of total facilities management market revenues, Qatar is playing catch-up with UAE. The 2006 Asian Games in Doha has helped to stir commercial and residential developments in the country, and it is now enjoying a boom in its construction sector. Unlike the UAE, Qatar is populated by single-service maintenance contractors, but is slowly developing a Total Facilities Management mentality.

Although it has maintained its position as a regional financial centre, Bahrain is stepping up its efforts to diversify its economy into tourism, retail and business services sectors. Mixed-use developments have already commenced and offer considerable potential for the TFM sector. However, because of the country's small size, this potential is not as attractive as that of UAE and Qatar. The real estate and construction sectors in Oman and Kuwait are far less developed hence opportunities for TFM are lower at the moment.