Europe Facility Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Europe Facility Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Europe Facility Management Market is expected to grow at a CAGR of 3.72% during the forecast period (2022 - 2027). Europe is supposed to be one of the biggest outsourced markets for facility management services in terms of maturity and sophistication.

Key Highlights

• In terms of sophistication and development, Europe is one of the largest markets for outsourced facility management services. Small local companies concentrate on single contracts and single-service solutions, whereas the region's facilities management business operates with integrated contracts from big vendors across continents and countries. However, given the regional dynamics, there are more options than ever to combine facility management and corporate real estate.
• Additionally, facility management (FM) covers infrastructure management for an organization, strategies and procedures for managing buildings, and general harmonization of the workplace. For an organization, this system standardizes services and streamlines procedures.
• Several service providers with operations in the region have been concentrating on growing their presence over the past ten years to take advantage of the rising demand for facility management, particularly given the current trend of outsourcing non-core functions. In addition, given the dynamics in the country, the United Kingdom has seen more chances to use facility management and healthcare.
• The Q3 2021 survey of RICS UK reported in September 2021 showed that the demand for FM services is still increasing in most industries except for retail. A total of +77% of respondents reported an increase in healthcare demand during the epidemic's start. Per previous statistics, the need for services in retail is declining, but this quarter only a net balance of -30% was reported as a fall, up from -46% in Q2 and -73% in Q1.
• The public sector's contribution to the facility management market in the United Kingdom is greater than any other European country in terms of end-user demand. This is primarily due to the government's limited budgets, forcing it to outsource essential facility management services continuously.
• The demand for workers with better requirements has led to a rise in the market for European facility management, which has experienced moderate development. It is anticipated that this scenario will support the market's growth during the projection period. The prolonged pandemic has led to consistent market expansion in the area. However, the pandemic has reduced production, sharply decreasing business inputs. ​
• The outbreak of COVID-19 has had a mixed business impact on facilities management firms. The limitations on people's freedom of movement led to a fall in project work and activity levels across numerous client sites. The pandemic lockdown had a negative impact on major market participants, including Mitie, CBRE Group, and others.

Key Market TrendsCommercial Buildings Segment to hold significant share in the market

• Investment firms typically focus on the European residential or commercial property markets. Commercial buildings offer lucrative opportunities, making them an appealing form of investment in the region. As a result, the region's growth in the Facility Management Market during the forecast period will be aided. Commercial investments suggest higher cash flow potential and frequently provide better returns on investment.
• The Facility Management market is witnessing multiple partnership activities between the vendors and commercial entities in Europe. For instance, in June 2022, BNP Paribas Real Estate (BNPPRE) was selected by the Government Property Agency (GPA) as its new strategic partner for national real estate and financial services. The agency's continuous growth is supported by this new strategic agreement with BNPPRE, which provides quality financial management services for real estate and property-related matters. The GPA added that the organization aspires to attract top-tier strategic partners to guarantee that the agency offers a modernized, shared, sustainable, and cost-effective government estate that enables civil servants to function effectively throughout every country and region of the UK.
• Similarly, in October 2021, Siemens Energy, which recently separated from Siemens AG to operate as a separate company, extended its collaboration with Parisian Company for the Railways and Electric Tramways industry (SPIE SA) for three years to ensure technical facility management for Siemen's office and production space, which totals about 385,000 square meters.
• The gaining interest in establishing smart buildings and other IoT technologies provides various opportunities for the vendors in the market to introduce IoT-based facility management and accelerate the growth of smart buildings in Europe. For instance, in January 2021, Climate partnered with Wattsense to introduce LoRaWAN devices and an end-to-end energy efficiency solution to help facility managers and property owners to optimize and control energy consumption and adapt to smarter technologies with IoT integrations.
• The German facility management service growth is attributed to the increasing demand for customized solutions for different in-house and outsourced facility management. Moreover, the rising number of commercial and residential buildings in major cities pushes the need for facility management services across the country. Rapid infrastructure development and the increasing focus on integrated facility management services are anticipated to influence the studied market positively.
• Modern offices with long-term tenants remain highly sought-after by investors despite all the discussions surrounding hybrid working. The growing business acumen among industry leaders and diversification of the economy from automobile industries to other avenues is expected to increase the demand for facility management services in the country.

Big Data Allows Facility Management Teams to Drive for Efficiency, Sustainability, and Cost Savings

• Facility management has been evolving rapidly over the past several years, resulting in widespread changes to Europe's industry. Facility management is undergoing a paradigm shift in the region as trends related to data, disruption, evolving amenities, and new workplace concepts are gaining traction and becoming more popular.
• The trends in the European market are for a progression from single services to bundled services and further toward the integrated facilities management approach. This offers a broad scope of services and longer-term contracts, adding value, driving better quality and economies of scale, and increasing the demand for outsourced services, where specialist expertise is required.
• The outsourced FM has been successfully used in various sectors, including the public sector, retail, professional services, healthcare, technology, logistics, manufacturing, and education. The areas that FM services look after vary widely and primarily depend on their type, the size of the company, and the sector in which it operates. This is not a one size fits all approach. Some organizations will only require a single service solution provider, whereas other big organizations will look for a bundled services offering or complete facilities management solution.
• Vendors in the region have been providing bundled services to their customers that offer multiple advantages for clients. For example, PTSG, through its bundled services, provides a multi-disciplinary capability for clients. This often gives them a complete specialist services solution, with the benefits such as one single point of contact for all the services, a more focused approach toward the servicing of their assets, keeping the building(s) in first-class operational order, and associated cost savings. By offering a bundled service, the company can ensure compliance with all services provided by PTSG.
• According to The Q2 2021 RICS UK Facilities Management Survey, approximately 28% of the respondents believed that the Integrated FM sector would witness the highest growth in the next 12 months in February 2021. The response rate was slightly decreased as 27% of the respondents believed Integrated FM to witness the highest growth in May 2021. In Q1 2021 and Q2 2021, bundled FM and in-house services received a higher percentage of responses for growth rate. However, the integrated FM service was significantly ahead of the single FM service in the survey.
• Future big data investments by FM organizations will increase as advanced and innovative technologies are developed. The respondents predict their respective companies will enhance BDA investments by creating complete IoT systems, establishing analytical skills, and utilizing augmented reality and artificial intelligence (AI). FM organizations must collaborate with technology companies, consultants, and higher education institutions to scale up the applications for enterprise-level usage.
• As of August 2021, 453 data centers were situated in Germany, according to Cloudscene. Facility managers ensure that a data center is always accessible, secure, and operate optimally. The emergence of technologies like Big Data, etc., necessitates the deployment of large data center storage. Organizations heavily rely on facility managers since data centers fuel many of today's enterprises.

Competitive Landscape

The Europe Facility Management Market is highly competitive with the presence of diverse firms of different sizes. This market is anticipated to encounter several partnerships, mergers, and acquisitions as organizations continue to invest strategically in offsetting the present slowdowns that they are experiencing. The clients in this region are employing FM services to increase the ease of their business operations. The market comprises key solutions and service providers, such as CBRE Group, Mitie Group PLC, Emcor Facilities Services WLL, Interserve Limited, and G4S Facilities Management UK Limited.

• March 2022 - A new, multi-million pound, five-year contract with Mitie has been given to the company to supply BAE Systems with a fully integrated facilities management (FM) service. The contract unifies various contracts for four of BAE Systems' divisions under one roof and encompasses 26 BAE Systems sites throughout the UK. As part of the contract, Mitie will offer a variety of FM services, including catering, pest control, maintenance of the mechanical, electrical, and building fabric, cleaning, reception, waste management, gardening, and mailroom.
• June 2021 - G4S partners with OneBanks in shared branch banking to enable banking customers to pay bills, deposit, and withdraw cash and coins at OneBanks kiosks. The kiosks will be equipped with the G4S 360 Intelligent safe will allow its customers to pay utilities and bills with cash.
• February 2021 - CBRE Group acquired a 35% stake in Industrious, a flexible workspace provider, ahead of a potential IPO in 2021. CBRE, based in Dallas, paid almost USD 200 million in cash for primary and secondary shares and is transferring its flexible workspace brand Hana, which has ten locations in the United States and the United Kingdom.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Please note: This publisher does offer titles that are created upon receipt of order. If you are purchasing a PDF Email Delivery option above, the report will take approximately 2 business days to prepare and deliver.