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5 Trends to Look Out for in UAE Facility Management Market

UAE facility management market is soon becoming a hot topic in the eyes of a lot of Gulf-based business leaders, and the origin to this topic is very interesting in itself. The stupendous decline in oil prices and almost overnight erosion of liquid capital following the final vestiges of the 2008 global financial crisis severely impacted the GCC countries, not just economically, but mentally and socially as well. The groupthink quickly came to the conclusion that the sea-change in energy markets required proactive, pragmatic thinking, rather than the simple reactive game that high oil prices had led them to play over the past 50-odd years.

Energy based economies, whether Venezuela, Nigeria or Russia, had all been crippled severely, and the GCC was haemorrhaging money. A decision was made, individually in all GCC countries but with the same conclusion in mind: the economy had to change and the starring role of energy assets in the economy would have to change with it. In this dramatic situation, the choice was made to leverage the country’s impressive infrastructure investments to switch to a services-oriented economy.

Tourism, real estate, healthcare and education would be the new pillars on which to build a new kind of economy, one where energy would play a supplementary role. TechSci Research brings you the latest on the UAE facility management market, one of the major successes of the UAE government over the past 5 years or so, and how it can act as a model for other service-sector based developments across not just the country, but across the GCC countries.

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1)    Strong Growth in UAE Facility Management Market

The UAE Facility Management Market Size, in terms of value, has experienced double digit growth over the past half-decade or so, from just over $6 billion in 2011 to $11.26 billion in 2016 with a y-o-y growth rate ranging from a high of 16.25% in 2013-2014 to a low of 11.65% in 2012-2013, which is extremely impressive, to say the least.

TechSci Research experts predict that the market for UAE facility management services will continue to grow over the next 5 years, even if not perhaps quite as rapidly. The figure being provided for the 2021 fiscal cycle is $17.41 billion, which will make the growth story of the UAE facility management market all the more impressive.

Another interesting factor behind the UAE facility management market is the type of companies operating in the market. Leading players in the UAE facility management market include Emrill Services LLC., Imdaad, Farnek Service LLC, EFS Facility Management Services and Khidmah L.L.C, among others. Most of the major UAE facility management companies are indigenous, and a majority of them are Dubai based.

This implies that not only are the companies able to better understand the needs of their customers, but also that many of the companies are in their home market for the long term, which would imply more stability and better chances of consolidation, which would further the chances of witnessing growth in the market.

Companies operating in the UAE facility management market are expected to consolidate as Tier-I and Tier-II companies expand further through merger and acquisitions. For instance, in 2017, UAE-based facilities management (FM) provider, Imdaad announced investment of USD16 million for the acquisition of small players. Many of the companies set up and operating in the UAE are looking towards long term global and local cues to help them make informed business strategy decisions.


2)    Robust Investment in Construction

The future for the UAE facility management market looks just as bright as its contemporary history. Construction projects worth $ 629 billion are expected to be completed in UAE by 2021. Upon completion, these projects will pave the way for further growth of facility management services in the country. As mentioned previously, shrewd companies operating in the market are already starting to evolve their long-term plans to correspond with the major indicators being witnessed in the overall economy of the UAE.

Construction sector spending in the UAE has been stable and robust, if not quite as phenomenal as what is being witnessed in the UAE facility management market. Construction spending has grown from $ 37.68 billion in 2012 to $ 41.58 billion in 2015. The CAGR over the years 2012 to 2015 has been slightly under 3.5%, and is following UAE’s GDP growth rate, a welcome sign given that investments are set to increase given a strong run by the economy.

As global demands pick up and if all prices stabilize as the markets clear, a strong GDP showing will provide a major boost to UAE’s construction spending, which will eventually spur the UAE facility management market.