By Becca Wilson
Second phase of research by Frost & Sullivan and CMPi concludes outsourced FM market worth $4.83bn.
The outsourced FM market (excluding Saudi Arabia) was worth US $4.83bn (AED 17.7bn) in 2006 and is set to reach around $10bn by 2012.
The findings were reported in the second phase of research conducted by Frost & Sullivan. The research was commissioned by CMPi, organisers of new FM show, Working Buildings Middle East.
Event director, Chris Fountain, said: "This comprehensive analysis of the facilities management market is good for the industry as it provides a reliable study of the sector.
"The rapid pace of growth in the FM here is very exciting and demonstrates the opportunities that are being created in our industry. However, with opportunity comes responsibility and the market must be careful to ensure the focus is on the right people developing the right skill sets to keep up with this expected growth."
Included in the findings were the current drivers and restraints behind the market. On a whole, there are more drivers than restraints which initially communicates a positive message.
However, as you can see from the table, the shortage of skilled man power, the lack of awareness around total facilities management (TFM) and increased inflation are restraints that puts an enormous amount of pressure on the industry to still perform well.
Commenting on the findings, Bruce Moult, senior manager of the infrastructure and facilities management department of Dubai World Central, said: "I think the figures are rubbish. When you use the word outsourced, in reality, there are very, very few true outsourced contracts. For example, you could say that Emaar outsource to Emrill but in reality they don't. Companies like this are organic, in-house operations.
"So in terms of Government departments outsourcing and independent companies like the banks or petrol companies or other institutions, they just don't outsource."
Another facilities management company to shun the findings, is Compass. Managing director of business development at Compass, Graeme Tomkins, said: "Given that the Frost & Sullivan report on the European FM market estimates that the outsourced market in FM will be worth about $22bn by 2010, I think the figure for the Middle East does appear quite high, even given the size and complexity of ‘cities' and projects that are being developed. Irrespective of that though the market is huge and extremely dynamic."
The next five years are a crucial time for the facilities management market, with more buildings planned and old buildings starting to see the consequences of not being operated and maintained properly.
Tomkins added: "There has been a huge amount of residential development over the past few years.
"I think that the market will begin to move away from the construction of residential buildings and towards commercial building and infrastructure creation as well as projects aimed at the tourism market."
Moult thinks that one of the drivers behind the market is the number of professional FM companies that have already established themselves in the Middle Eastern market.
While Tomkins says that infrastructure (roads, rail and airports) and the booming oil and gas industry are key drivers.