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Facilities Management Market: Cross-border M&As Reveal Mammoth Opportunity for Growth

Facilities Management Market: Cross-border M&As Reveal Mammoth Opportunity for Growth

Albany, New York: The vendor landscape of the facilities management (FM) market is characterized by the presence of industry leaders Sodexo, Inc. and ISS World Services A/S. Transparency Market Research reveals that these two companies, along with Broadspectrum (Australia) Pty Limited and Bilfinger HSG Facility Management GmbH, together accounted for only 28% of the global market in 2015, indicating that there is significant scope for other service providers to strengthen their position in the FM services market.

“Cross-border mergers and acquisitions with expanding regional coverage and customer network hold immense opportunities for FM service providers owing to the expansion of business activity across the globe,” a TMR analyst predicts.

TMR finds that an increasing number of companies have been providing bundled facilities management services – a combination of soft and hard FM services – in order to improve the efficiency of business processes and deliver quality and valued services to their clients.

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“Bundled facilities management services have proven to be extremely useful in strengthening long-term relationships between the service provider and the client,” says a TMR analyst. Several companies in the U.K., for instance Northampton-based 14forty FM Support Services and London-based G4S plc, have been dedicatedly providing a variety of bundled FM services such as security, cleaning, reception, food and hospitality, and workplace management. This has enabled an enhanced level of professional development and cross-service efficiencies of facilities management services.

On the other hand, total FM services have also gained much traction in recent years. “These single-point delivery services have successfully helped improve services and bring down overall cost,” the author of the study observes. “Companies have also found that total FM services provide central control to the entire facilities management and minimize complexities among various services.”

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Tackling Cost Issues with Facilities Management

As more and more companies aim toward reduction in maintenance and operation costs, facilities management has emerged as the ideal solution for firms in the short, medium, and long term. FM services have been supporting companies in reducing capital expenditure and increasing investments in primary services, a goal which most organizations strive for.

Energy consumption is also a major hiccup in most business activities since excessive consumption of acts as an added operating cost. By developing an integrated design for business operations, FM services held companies curb energy usage and improve overall performance.

Facilities management outsourcing services have emerged as an alternative for firms that want to focus solely on their core functions and business strategies. In the short and medium term, the adoption of outsourced FM services is likely to have a moderate impact. However, TMR predicts that these services will have a significant impact on companies in the long run. “This can be attributed to the increasing number of third-party contracts for FM outsourcing and the surging adoption of facilities management services in regions such as Europe, North America, and Asia Pacific,” the analyst states.

The opportunity in the facilities management market is set to rise at a 13.6% CAGR over the course of the forecast period, TMR finds. This means an increase from US$606.4 bn in 2015 to US$1,887 bn by 2024.

This review is based on the findings of a TMR report titled “Facilities Management: Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016-2024.”

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