United Arab Emirates Facility Management Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

United Arab Emirates Facility Management Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The UAE facility management market is expected to register a CAGR of 6.72% during the forecast period. The main things that are driving the need for facility management in the UAE are the growing number of tourist-oriented railways, airports, transit facilities, hotels, etc., and the strict rules about safety, cleanliness, and hygiene in the UAE.

• Facility management services across Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Umm al Quwain, and Ajman have matured, with infrastructure development projects rising across the United Arab Emirates for economic growth. Furthermore, the growing concentration of facility management service providers in the regions has further affected the companies' bottom lines. The surging emphasis on green building practices is increasing the demand for facility management in the United Arab Emirates. The country's government is also concentrating on smart cities, with plans to digitize up to 1,000 government services and establish 2,000 Wi-Fi hotspots.
• Moreover, green buildings require FMs to efficiently manage air quality, energy usage, water consumption, and waste. Low operating costs, low maintenance costs, low development costs, a healthier indoor environment, and enhanced durability are the characteristics of a green building. Owing to the increasing demand for sustainable facility management solutions, market players in the region significantly improved their offerings and gained opportunities to showcase them further.
• Furthermore, Dubai's strategic location between Europe and Asia serves the East and the West, offering optimum trading conditions for the Emirate. To facilitate trade and e-commerce operations, Dubai has executed various crucial initiatives to develop its technology and infrastructure to implement an excellent logistics infrastructure and a well-integrated transport system. Since e-commerce as a whole is growing quickly, and warehouses are being built quickly in the country, the demand for facility management services is also going up.
• However, the increasing stringency of labor laws and immigrants compensating with the workforce hampered market growth.
• With the outbreak of COVID-19, the UAE Facility Management Market witnessed a growth decline. Also, it affected the profits and liquidity of businesses by increasing procurement expenses and capital costs while simultaneously forcing customers to defer purchases, thus reducing the income of facility management companies.

The commercial and retail segment is one of the prominent segments that contributes a significant share of facility management in the United Arab Emirates, owing to the rapid infrastructure development and rising demand from hotels, retail outlets, malls, and office buildings in the country.

• However, in the United Arab Emirates, Dubai accounts for most of the development projects undertaken in the country's commercial sector. Moreover, the Dubai Expo 2020, which happened in March 2022, had USD 7.0 billion in investments from the Dubai government across a range of infrastructure and related commercial projects, which also increased the demand for facility management services in the retail sector.
• 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 the United Arab Emirates is expected to allow more expansion of commercial and facility management services.
• A survey conducted by JLL of commercial real estate customers of large companies globally, including the United Arab Emirates, has found that 67% of respondents were planning to invest in workplace mobility programs, where flexible office space supplies may have a significant role. This trend may act as a disruption to the market.

Economic growth, ongoing diversification, and a growing population—especially among high-net-worth individuals (HNIs)—have led to increased retail sales in the region. UAE retail has undergone a massive transformation in recent years thanks to the combined efforts of private and government institutions.

• Among the country's cities, Dubai accounts for most of the development projects undertaken in the country's commercial sector. In May 2022, Dubai Land Department (DLD) witnessed a growth of 41% in commercial office sales year-over-year from May 2021, with an 87% increase in the value of properties sold, as more end users are leveraging favorable business conditions for regional and local growth. Strong growth in the commercial real estate sector is likely to have a positive effect on the demand for facility management services.
• Moreover, hosting "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 may further increase the demand for facility management services in the commercial sector. Furthermore, the rise of e-commerce has led to the construction of new warehouses and logistics centers, driving the demand for FM services.
• The growth of the Dubai region is mainly due to increased investments from the government and is expected to positively influence the demand for facility management in this region. Furthermore, improvement in tourism activities in this region post-pandemic is expected to contribute to the growth of the hotel industry, thereby creating ample demand for facility management services.
• Furthermore, the outsourcing trend is gaining traction in different industries across Dubai, offering growth prospects. 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 the treatment of 75% of waste by 2021, as stated by the EcoMENA Organization. These initiatives are expected to increase the region's demand for facility management services.
• Facility management firms, amid COVID-19, have been preparing to embrace a more significant role by emerging as strategic partners in the safe re-opening of offices. Likewise, adopting appropriate resources, strategies, and technologies has substantially increased. The resumption of activities and occupants' confidence to operate on secured premises are some of the drivers of booming FM services in Dubai. Hence, substantial growth is expected within the market over the forecasted period with implementations such as connected building technologies.

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. Key players include EFS Facilities Services Group, Imdaad LLC, and Enova Facilities Management Services LLC.

In June 2022, ServeU LLC, a provider of facilities management (FM) solutions in the UAE and a division of Union Properties, will declare a partnership with Microsoft to update its Computer-Aided Facilities Management (CAFM) system. To configure and personalize its Microsoft Dynamics 365 Field Services, the company has also disclosed its collaboration with NSquareXperts. The new alliances support the company's goal of expanding and diversifying its FM service offerings. This partnership will allow the company to drive effective tactical, strategic, and operational FM principles all over the UAE.

In 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 2021, 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.

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