New Zealand Facility Management Market - Growth, Trends, Covid -19 Impact, and Forecasts (2023 - 2028)

New Zealand Facility Management Market - Growth, Trends, Covid -19 Impact, and Forecasts (2023 - 2028)

The New Zealand (NZ) facility management market is expected to grow at a CAGR of above 2.5% during the forecast period, 2022-2027. With the help of facility management, organizations achieve and sustain a quality environment and operational services to meet strategic needs at the lowest possible cost.

· Despite the pandemic interruption, the facility management market in the country is growing steadily. The demand for FM services in the country is attributed to end-user awareness and their active involvement in FM services, rising awareness of energy conservation, and developed building infrastructure. The large facility based in several end-user sectors, such as retail, IT and communication, government administration, and others, is expected to add significant and steady facility management services demand in the country.

· The growth of the FM market is hampered by a lack of scale in some parts of the country and availability of funding among the end-users, posing challenges in adopting facility management services. The existing FM practices are inclined towards a conventionally operational rather than strategic approach. The absence of skilled personnel across the country restraining the advancement of facility management services.

· The facility management service providers who have a strong presence in the Australian market prefer to explore the growth opportunities in the New Zealand market. As a result, the facility management market in the country has become a mix of local and international FM service providers.

· The Covid-19 pandemic has severely impacted the business sector in the country. However, the manufacturing sector has less impact but suffers from challenges such as unavailability of manpower, and disruptions in the supply chain due to which businesses are unable to operate at their capacity.

· As a service and innovation-oriented economy, Auckland has developed manufacturing industries and a globally focused service sector. Having a progressive presence of manufacturing industries, the city contributes 37.9% of GDP to the country, according to Stats NZ Tatauranga Aotearoa.

· The growth of the Auckland region is mainly due to increased investments from the government in commercial and residential infrastructure. It is expected to positively influence this region's demand for facility management. Furthermore, the reopening of tourism activities in this region post-pandemic is likely to contribute to the growth in the hotel industry, thereby creating demand for facility management services.

· In addition, the multinational players prefer to expand their business operation in Auckland owing to several benefits such as a transparent business climate and a government committed to growth and innovation. Also, the presence of robotics, precision engineering with the advanced digital infrastructure, and a highly skilled workforce attract global players to the country, further adding to the demand for facility management services.

· For instance, in September 2021, Amazon announced a plan to open three data Centres in Auckland by 2021 with the spending of NZD 7.5 billion to develop three Availability Zones (AZ) in the Auckland region. Such investments and expansions are expected to add demand for facility management services.

· New Zealand holds high-value growth opportunities for international business and investors. This is due to several advantages such as a stable, transparent business climate, a developed open economy with a free-floating currency, a stable political system, and a government committed to growth and innovation. This resulted in attracting foreign companies seeking to set up in New Zealand and led to the demand for commercial offices and buildings on the rise by the foreign companies and commercial real estate investors.

· Though the volume of commercial building work, including shops and offices, has fallen with the pandemic, the demand for commercial properties is gaining momentum post-COVID-19 owing to the requirement of more flexible and local workspaces by companies in terms of space allocation per desk following the pandemic.

· The expansion of the international organization in the country has further led to the growth of the commercial sector and is expected to continue over the forecast period. For instance, in May 2021, Crawford & Co announced that it is expanding its offering in New Zealand to optimize its presence in key locations of the country.

· Furthermore, in February 2020, Intertrust, a global leader in providing tech-enabled fund and corporate services to clients operating and investing in the international business environment, opened an office in Auckland.

The New Zealand Facility Management is highly fragmented as it is a highly competitive market with the presence of several players of different sizes. This market is expected to experience a number of mergers, acquisitions, and partnerships as companies continue to invest in offsetting the present slowdowns that they are experiencing strategically.

· July 2021 – Serco Asia Pacific, a company with a significant presence in New Zealand, has announced a new integrated facilities management business unit incorporating key FM and asset management services. This new business company will provide a platform to enhance existing facility management contracts and broaden capability across Serco’s other five key sectors, including Defence, justice and immigration, health, citizen services, and transport.

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