Saudi Arabia Facility Market Outlook to 2022

Overview

Executive Summary

Market  Outline

Economic growth in the KSA slowed further in 2017 however the country's economic growth recovered to 2.2% in 2018. The Saudi Arabian economy is anticipated to expand in 2018 with a 1.8% increase in GDP, mainly owing to the oil sector, which grew 2.9% while the non-oil sector expanded 1.7% in 2018, compared to 1% the previous year.

The year 2019 didn’t bring much confidence over economy due to the implementation of significant cuts in oil production in 2019, followed by attacks on Saudi oil facilities in September 2019. Nonetheless, Non-oil sector growth increased as the fiscal stance turned more supportive and the government settled US$43 billion in arrears to private firms.

Shift in Focus on Non-Oil Sector: Drive for Facility Management (FM) Market

The Facility Management Market (FM Market) of Saudi Arabia is vast, lucrative, and fragmented with high potential. The market has witnessed robust growth over the past five years.

• UAE is the prominent FM Market in the GCC region. However, Saudi Arabia’s FM Market is most promising, as it remained stable even in times of crisis and remained an attractive place for investors.
• Dubai has been the focus of the market, but Facility Management (FM) outsourcing rates are increasing across the whole region which can act as a growth hurdle.
• Public sector services are majorly outsourced, whereas the private sector tends to in-house or use simple manpower supply companies, rather than procuring full  FM solutions.
• Technological development in the country has given wider scope to the facility management industry. The facility management market has increased at a CAGR of 10.3% during 2012-2017.
• Increasing size of the construction and real estate sector with the Vision 2030 of the country is a testimony for the growing FM opportunities in Saudi Arabia.

The major growth drivers for the industry are the booming real estate market, growing construction industry, an increasing number of shopping malls & supermarkets, expanding hospitality sector, and others. A large chunk of FM Services in the past where in-housed whereas with the rising awareness, preference have changed to outsourcing services.

An Attractive Platform for Investment
The Facility Management Market (FM Market) of Saudi Arabia is vast, nascent, lucrative, and fragmented with high potential. The Kingdom’s FM Market is most promising, as it remained stable even in times of crisis and remained an attractive place for investors. In the Gulf Cooperation Council (GCC) region, Saudi Arabia holds the largest market for facility management services, which accounted for a value share of about 44.6% in 2017.

The Facility Management Market is segmented on the basis of three broad categories namely - Type of Services, Sector of Applications, and Mode of Services. 

Based on the Type of Services the market is sub-segmented into Soft Services and Hard Services. The Hard Facility Management Services dominate the market contributing the leading share of 55.3% in terms of revenue. However, on the basis of Sector of Application, it is segmented as Government, Real Estate, Retail and Commercial Sector, and Others.

The third category is on the basis of Mode of Services i.e. In-house and Outsourced Services, among which In-house dominated the market. The outsource market is anticipated to escalate, among which the integrated facility management market is expected to contribute the leading share.

Outsourcing Services Gaining Momentum

The market has witnessed robust growth over the past five years (2012–2017) with a CAGR of 10.3%. Increasing outsourcing facilities availed by the government and well-supportive changes in regulation are pushing up asset management. Operations & Maintenance and facility management were not considered distinct in the country in the past, but with elevated use of FM services due to its rising awareness and its benefits, the difference between the two services is being recognized.

The FM market in the past was highly in demand for soft services but with technological advancement, the hard services came into play.

In-house services were the major contributors to the industry in terms of Mode of Services followed by the outsourcing services. However, Outsourcing is gaining prominence owing to growing awareness about its benefits, increasing number of international players, and Joint Ventures between players.  Additionally, the service preference by the Saudi population has been the highest for integrated followed by single and bundled services which further enables latter’s growth.

Construction Industry: The Key Driver

The Construction Industry which encompasses the building, infrastructure and energy markets is the foremost driver to the facility Management Market. With the increase in offices, manufacturing units, residential apartments, business centers and other such facilities, the demand of facility management services in the country has elevated making a positive impact on the market. The incline in the construction industry will be driven by the Vision 2030 of the Saudi government.

The Vision 2030, is the major highlight of Saudi Arabia's Government which is an ambitious plan to build the best future for the country and is based on three themes namely a vibrant society, a thriving economy, and an ambitious nation, which represent the unique competitive advantage of the Kingdom. This vision envisages to transform the Kingdom completely and thereby act as a driver to FM Market.

Scope of Study

The synopsis presented has been derived from the report titled “Saudi Arabia Facility Management Market: An Outlook to 2022” published by Makreo Research And Consulting Firm. The report deep dives into market assessment on various parameters, discussing major segments, and accessing the impact of economic, political, technological& demographic factors on the market. The study also discusses market dynamics which offer an understanding of industry trends, driving forces and major challenges hampering the growth. The report gives an understanding of future opportunities prevailing in the market which may help market players to leverage untapped business potential.

Key Players in the Saudi Arabia Facility Management Market:

Almajal G4S, Zamil Operations & Maintenance, Interserve PLC, Samama Holding Group,  Nesma Trading Co. Ltd.

The report helps readers to gain information on following areas:

• What would be the present and future expected performance of the Saudi Arabia facility management?
• What are the major Type of Services enabling the market growth?
• How to assess the market revenue and its major segments (By Type of Services & By Mode of Services)?
• How facility management services assists the key sectors and drives the market?
• What are the key dynamics driving the facility management market in the Saudi Arabia?
• How the trends and developments impacts the facility management market in Saudi Arabia?
• What are the major challenges affecting the market growth?
• Who are the Major Service providers in the facility management market and why?
• How the government policy framework impacts and shape up the facility management market?
• How technology plays an efficient role in driving the industry and benefits in future?