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

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

The UAE Facility Management Market is expected to register a CAGR of 8.50% over the forecast period from 2022 to 2027. The surging emphasis on green building practices is increasing the demand for facility management in the UAE. The country's government is also concentrating on smart cities, with plans to digitize up to 1000 government services and establish 2000 Wi-Fi hotspots. Furthermore, the UAE's open trade policies attract foreign investors and boost construction activity in the country. The construction industry is the backbone of the UAE economy, and it's reassuring to see that it's expected to develop rapidly in the future years. The construction industry contributes significantly to the country's economic growth and development.

• Facility management (FM) consists of multiple disciplines to influence the efficiency and productivity of organizations. Conforming with the industry best practices, the new management system standard constitutes a benchmark for developing and driving effective strategic, tactical, and operational FM principles across the UAE.
• Facility Management Services across Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Umm al Quwain, and Ajman have become mature. With infrastructure development projects rising across the UAE for economic growth, allied FM services are also required in tandem. Hence, a Facility Management Standard that sets apart the industry by adopting global best practices and policies offered a win-win situation for FM organizations and customers in this country.
• Services in the FM industry have been commoditized to a great extent. Also, end-users are very price-sensitive, and contracts are thus aimed at shorter terms. A real estate over-supply has been creating pressure on rent yields, thus leading the customers to cut costs on FM services.
• The presence of a large number of players providing some sort of facility management services has led to a contested market space with un-differentiated services, thus creating pressure on margins. Further, pressure on margins and declining pay scales, along with restrictions on work permits and the cost of nationalization, are significantly challenging the FM vendors.
• With the outbreak of COVID-19, the UAE Facility Management Market is expected to witness a slight decline in growth. During the initial phase of the virus outbreak, the imposed lockdown has led to a workforce shortage across the FM companies as the majority were non-local workforce. Also, as the country’s infrastructure spending witnessed a slowed growth, Dubai and Abu Dhabi, for instance, had their lockdown measures.

• The commercial and retail segment is one of the prominent segments that contributes a good share of facility management in the UAE. This segment is owing to the rapid infrastructure development and rising demand from hotels, retail outlets, malls, and office buildings in the country.
• Moreover, the commercial sector covers office buildings occupied by business services, such as corporate offices of manufacturers, IT and telecommunication, finance and insurance, property, and other service providers. The rise in the IT sector across UAE will allow more expansion in the commercial sector along with facility management services.
• For instance, the telecom players are focusing on 5G deployments in UAE, which will create significant opportunities for the region’s facilities management sector. For instance, in June 2020, Etisalat UAE concentrated on non-standalone 5G deployments for the next two years before developing a standalone 5G network.
• A survey conducted by JLL of commercial real estate customers of large companies across the world, including the UAE, has found that 67% of respondents were planning to invest in workplace mobility programs, where flexible office space supplies will have a significant part. This trend will act as a disruption to the market.
• Additionally, economic growth, ongoing diversification, and a growing population– especially among high-worth individuals (HNIs)- have led to an increase in retail sales in the region. With the collective effort of the private and government institution, UAE's retail has seen a massive transformation in the last few years.

• Dubai accounts for most of the development projects being undertaken in the country's commercial sector. Moreover, the hosting of “Dubai Expo 2020,” which was conducted in 2022, required substantial investments from the Dubai government across a range of infrastructure and related commercial projects, which will further increase the demand for facility management services in the commercial sector.
• The growth of the Dubai region is mainly due to increased investments from the government and is expected to influence the demand for facility management in this region positively. Furthermore, improvement in tourism activities in this region post-pandemic is expected to contribute to the growth in the hotel industry, thereby creating ample demand for facility management services.
• Dubai aims as a smart city by 2021, which has led to the proliferation of information technology (IT) and consulting firms. Due to this and the country’s economic diversification initiatives, many new office complexes have been constructed in the country, which has pushed the demand for facility management services in this sector. Also, in line with the Smart Dubai 2021 plan, ServeU implemented its digital roadmap by focusing on business enhancement via operational performances.
• Also, the outsourcing trend is gaining traction in different industries across Dubai, offering growth prospects for the industry. In addition, the UAE government is encouraging green construction activity. For instance, Dubai has started implementing its Clean Energy Strategy to achieve 75% clean energy by 2050. Green targets include 50% clean energy by 2050 and treatment of 75% waste by 2021, as stated by the EcoMENA Organization. These initiatives are expected to increase the demand for facility management services in the region.
• Facility management firms amid COVID-19 have been preparing to embrace a greater role by emerging as strategic partners in the safe re-opening of offices. Likewise, the adoption of appropriate resources, strategies, and technologies has seen substantial growth.
• Resumption of activities and occupants’ confidence to operate on a secured premise are some of the drivers of booming FM services in the City. With implementations such as connected building technologies, the segment reports substantial growth over the forecasted period.

The UAE Facility Management market is highly competitive, with several domestic and international players active in the region. International participants operate in the country through partnerships with local players. With the market expected to broaden and yield more opportunities, more players are expected to enter the market soon. Key players include EFS Facilities Services Group, Imdaad LLC, Enova Facilities Management Services LLC, etc.

• February 2022 - Farnek, a smart and green facilities management (FM) firm based in the United Arab Emirates, created a new smart FM technology solutions company. The HITEK solution 4.0, developed in-house, was initially launched in Q3 last year, connecting people, assets, and spaces from multiple remote sites, using intelligent analytical platforms for cleaning, security, and maintenance, so they could be smartly centrally managed and monitored by leveraging the Internet of Things (IoT), Building Management Systems (BMS), Cloud, Machine Learning (ML), and Artificial Intelligence (AI) based technologies.
• August 2021 - ServeU Facilities Management announced its expansion by launching a consumer (B2C) segment from enterprises in the emirate. A new service called Home Essentials will give customers access to cost-effective facility management (FM) services for their homes.

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