Facilities Management Market Size to reach $809 billion by 2024, says Beroe
Source: PR Newswire
Raleigh, NC, Dec 07 - The global market size for Facilities Management Services in 2020 was $753.7 billion and $763.49 billion in 2021. It is expected to grow at a CAGR of 3 percent to $809.98 billion by 2024. The North American Facilities Management market has reflected a slight growth after relaxations in lockdown with significant demand from complex and cleaning services. The companies (buyers) based in Russia or Ukraine and want to minimize the risk of FM/RE service providers moving out of the business need to map the tier 2 and local companies to avoid service disruptions.
The impact on Commercial Real Estate and Facilities Management will likely be indirect, as the effects of the conflict feed through into commodity prices, inflation, bond yields, and, ultimately, economic growth. However, the significant impact will likely be higher energy prices, which add to the inflationary forces already being felt across most European economies.
Labor costs (wages and benefits) constitute approx—50 percent of the total costs. Vendors have to pay high salaries due to labor shortages and increased demand. An increase in remote working will likely minimize office utilization rates, while landlords exposed to short-term leases will be the most vulnerable.
The demand is expected to increase towards flexible contracts and co-working spaces post-COVID-19. In Q1 2022, the need for Facilities Management services, such as HVAC, cleaning, catering, physical security services, etc., increased by 4 percent globally, and it is expected to maintain the momentum.
Suppliers, as well as prominent buyers, are looking at various implementations of AI for delivering sustainable solutions in facilities management as the industry grapples with high cost, high expenditure, and heavy maintenance
Multiple suppliers are collaborating with equipment manufacturers to develop AI-based solutions coupled with IoT-based sensors to automate and improve the efficiency of various processes such as cooling, lighting, etc.
IoT-enabled building automation systems can integrate disparate systems – such as HVAC, lighting, security, access control, and video surveillance – into one set of rules, making it easier to manage.
IoT-based systems coupled with Data Analytics tools can offer predictive maintenance analytics to identify better the different systems needed for maintenance and help manage the cost of repairs and replace the building’s critical systems.
Continued emphasis on LEED certification aligns to make buildings more ‘green’, efficient, and sustainable. Constant product innovations have reduced the technology's prices and widespread adoption to ensure lower energy utilization. Additionally, the interoperability of various systems and equipment has confirmed that multiple systems can be put together to work seamlessly and directed at achieving targeted objectives.
Increasing adoption of robots in various services such as cleaning due to multiple advantages such as decreased labor expenses, the ability to perform tasks outside of work hours, increased efficiency via automation, and reduced safety risks. Some suppliers are also experimenting with using robots for security patrols and greeting visitors. In addition, drones are increasingly being used in surveillance, especially for vast properties and high-rise buildings.
Large buyers want to combine project management, integrated facilities management, and real estate management under a single supplier.
The key driver for this is the desire to have greater visibility into the organization's entire real estate portfolio and enable consistent service quality across locations.
Large organizations are increasingly using managed workspaces to accommodate their growing workforce and tend to spend during times of transition. This has led to an increased demand for facilities management service providers to support the adoption of flexible workspace arrangements and the ability to support employee flexibility, growing to create more comfortable, energy-efficient workplaces that support a positive employee experience.
Suppliers are looking at intelligent technology that can integrate with the control and optimization of building functions ranging from fire protection, security, and asset tracking systems to lighting management, HVAC maintenance, and intelligent parking through IoT sensors for building automation systems.
Buyers are increasing the average contract length for FM services like hard services and maintenance. This is driven by the understanding that with longer relationships comes more trust and the ability to test new strategies with greater confidence.
The emergence of the vested outsourcing model is again driving this trend as buyers look to take the preferred supplier engagement to a higher level.
Centralized command centers increase efficiencies because they can monitor many buildings, staff can conduct in-depth analysis, and they can leverage powerful software to run algorithms over a vast amount of data also save energy costs to the tune of 10 – 15 percent and Improve the sustainability of the building.
Sensor technology is IoT put in action. It allows a building’s assets to communicate their operational and health status without human intervention. Advances in sensor and battery technology have introduced wireless devices with little or no configuration and maintenance effort that can be deployed in minutes.
To mitigate risks associated with service quality, the buyers are shifting towards having collaborative relationships with their Facilities Management service providers. Buyers are outsourcing complex spending categories, aiming for cost savings of up to 20 percent. There has been a significant shift in the procurement of Facilities Management services from outsourcing to a single service provider to bundling services and now integrating all the services under one contract.
Vested Outsourcing is a relatively new trend in Facilities Management, with several large mature companies, that want more than year-over-year glide path savings engaging this strategy.
Beroe is a global SaaS-based procurement intelligence and analytics provider. We deliver intelligence, data, and insights that enable companies to make smarter sourcing decisions – leading to lower costs, reduced risk, and greater profits. Beroe has been a trusted intelligence source for more than 15 years and partners with 10,000 companies worldwide, including 400 Fortune 500 companies.
Learn more about Beroe - https://www.beroeinc.com/
Media Contact – Debobrata Hembram (email@example.com)