Hard Services Facility Management Market Size, Share & Industry Analysis, By Service Type (Outsourced and In-house), By Industry Vertical (Healthcare, Government, Education, Military & Defense, Real Estate and Others) and Regional Forecast, 2019-2032

The global hard services facility management market size was valued at USD 584.6 billion in 2018 and is projected to grow worth USD 1,133.99 billion by 2032, exhibiting a CAGR of 4.5% during the forecast period. Asia Pacific dominated the hard services facility management market with a market share of 35.86 % in 2018.

The facility management industry is enhancing the benefits and facilities offered to the organizations and associations for a stipulated time period. Adoption of advanced hard facility services minimizes the daily roles and responsibilities, that require minimal staff recruitment and services towards organizing the work atmosphere across different sectors.

Globally, the hard services are offered by contracting with the building management, that includes everything, such as workforce and their related services. Governments of Asian and GCC countries are implying essential public private partnership (PPP) projects in sectors including real estate, healthcare, and others. That designs core competencies and regulations for the modern hard facility services.

MARKET TRENDS

Rising Demand for PPP and Energy Management to Boost the Market Growth

In late 2016, the International Facility Management Association (IFMA) initiated a Global Job Task Analysis (GJTA) program for determining the daily roles and responsibilities for modern hard services facility management. According to the designed regulations, facility managers from 62 countries have established 11 core competencies for modern hard facility services worldwide. Moreover, the Saudi Arabian government has announced to deploy the public-private partnerships (PPP) to escalate its transportation, education and healthcare infrastructures and increasing energy management requirements. For instance, Saudi Arabia’s ministry of health proposed its first PPP project, where the ministry of health will seek proposals from international suppliers for projects which are valued more than USD 66.7 Million, over the next ten years.

Additionally, facilities management service providers are working continuously on adding energy management services in their portfolios. On the other hand, consumers are adopting such type of facility management, owing to rising energy costs and building’s energy consumptions.

MARKET DRIVERS

Emerging Real Estate Sector is Expected to Thrust the Market Growth

The government and private sectors across the globe are making large investments in the real estate buildings and public infrastructure, supporting the growth of facilities industry. According to the secondary research, in 2018, the global construction market is expected to reach at around USD 8 trillion by the end of 2030, driven by the infrastructure development across U.S., China, and India, hence driving the real estate sector globally. The increasing urbanization, particularly in Latin American and Asian countries is creating the huge demand for infrastructure projects, which in turn will boost the hard services facility management market growth. Governments in European countries are making investments in new smart city development projects. The European Union is expected to have over 300 smart cities by 2020, increasing the adoption of advanced hard services.

Inclination towards Integrated Facility Management Services Worldwide

According to the secondary research, a significant number of international market players of  hard services facility management are opting for integrated services owing to the digitalization processes. Key market players namely, Sodexo, Johnson Control and CBRE provide hard facility services that are integrated with IT platforms which is useful in in BAS protocols and integrates seamlessly with the client’s IT infrastructure. Major market players plan on amalgamation of the integrated facility management (IFM) solutions in their CSR agenda. For instance, Johnson Controls have partnered with the Standard Chartered Bank, a multinational financial and banking services company, to offer facilities management, energy management, project and workplace management services across 1,300 sites in Asia Pacific.

MARKET RESTRAINT

Staff Management and High Cost of Services Inhibit the Market Value

The facility executives of prominent hard services facility management market players reveal that it is a challenging task to hire hard working and efficient staff that believes in offering modern hard facility services. Also, the staff management is the most crucial activity compared to other responsibilities. Most of the companies face issue to recruit, train and motivate employees for delivery and distribution, warehouse and inventory activities and office support services. Hard facility services are less cost-effective, this is because the facilities management provider are expected to pay lease costs from their operational budget, thus restraining the market value of hard services. Hard facility services that are leased as an outdoor facility service are offered at a local market value, with initial solicitation from the area's corporation or administration office, prompting to market inconsistency and financial loss, henceforth restrains the market growth globally.

SEGMENTATION

By Service Type Analysis

The Outsource Hard Services is Estimated to Depict the Highest Growth Rate in the Forecast Period

The global hard services facility management market is segmented by service type, which is further categorized into outsource, and in-house services.

The outsourced hard services are projected to have progressive market growth owing to its increasing applications in healthcare, banking and financial services, biotech and many other sectors. Outsourcing the hard facility services remains cornerstones in the facilities management industry, due to rising importance of energy management services in the developed market. This type of service offers satisfactory facilities to the external firms, while building its operation and maintenance of cleaning services, thus boosting the demand of outsources hard services worldwide.

Furthermore, the in-house hard services are expected to portray moderate growth owing to its limited scope of services. The in-house hard services require business and management competencies to maintain its operational budget, long-term focus of its staff and strategic planning, hence minimizing the demand of in-house hard services across several sectors.

By Industry Vertical Analysis

Real Estate Sector Portrays Highest CAGR with Increasing Infrastructure Activity Globally

By industry vertical, the market of hard services facility management is divided into healthcare, government, education, military and defense, real estate, and others.

The real estate sector is predicted to boost the market of hard services facility management at a higher growth rate due to rising modernization, generating huge demand for commercial infrastructure development, hence imputing the hard facility services market growth. Developing countries and their governments across the world are constantly planning towards adoption of flexible strategies, leading to the efficient real estate development.

Education and healthcare sector are projected to depict progressive growth in this market owing to the increasing importance education and health in the society. People across the world are realizing the need of proper education required in the society to maintain safe and hygienic atmosphere to improve health of the young generation, thus enhancing the requirement of hard facility services.

The government of developing and developed countries are initiating ample of commercial projects, that will boost the demand of hard services facility management globally. Strategic plans across the military and defense sector allow the facilities management providers to offer wide range facilities, resulting in stagnant demand of hard services across the globe.

The other segment is likely to show steady growth due to limitations of the advance technology based hard services facility management and the stringent government regulations.

REGIONAL ANALYSIS

Asia Pacific portrays the largest market growth in the hard services facility management, due to rising real estate sector with increasing emphasis over modernization and urban development. China, and India have the highest population growth along-with numerous emerging market players, therefore escalates the market opportunities in various sectors. For instance, according to the Indian government, around USD 216 billion have been invested in basic urban infrastructure, out of which USD 1.2 billion is stipulated for the smart city investments. These type of investments in real estate sector drives the overall market growth worldwide.

The Middle East and Africa depicts vibrant growth rate due to increasing foreign direct investments (FDI) in energy management, real estate and many other sectors. Multinational corporations are setting up their business operations in the GCC countries, thus driving the outsourced hard services facility management market. For instance, Saudi Arabian government initiated the King Abdullah University of Science and Technology and the King Khalid Medical Centre in 2018, to enhance the education facilities across the region.

Moreover, the Latin America portrays progressive market growth due to increasing market opportunities via semi-public institutions. The Brazilian facilities management industry benefits the dynamic construction sector with increasing number of high-end commercial hard facility services. LATAM is experiencing dynamic market trend since 2014’s World Cup and 2016’s Olympic Games in Rio, with boosting infrastructure projects such as hospitals, educational institutions, airports and other sectors; this in return, is expected to drive the market.

Similarly, North America and Europe are likely to exhibit the moderate growth, as these regions comprise of developed countries and well-established organizations. European countries such as Germany, UK, France, the Netherlands, Belgium and many more depict mature penetration of facilities management industry. Public-private partnerships (PPP) model have already been integrated by Sodexo in Belgium prison in the year 2013, thus shows the market maturity across the region.

KEY INDUSTRY PLAYERS

Sodexo Implies Innovative Technology to Enhance the Facilities Management Services

Sodexo is the prominent catering and facilities management provider throughout the world. The company offers wide range of food services, hard and soft facility services and personal home based services across developed and developing regions. Moreover, Sodexo provides the outsourcing services with high-end performance and are cost-effective. The company expands its business verticals depending on the strategic planning based on technological trends, talent and sustainability.

• February 2020: Sodexo initiated the usage of automation and predictive data analysis using the cutting edge technology, for delivering improved, innovative and safe facility services across healthcare, education, government and other sectors in Australia.

Key Market Players Imply Strategic Investments to Enhance their Market Value and Expand Business Portfolio

Major companies dealing in the hard services facility management industry opt for strategies that helps to expand their business portfolio through acquisitions and mergers. Such planning helps to maintain the market position with expansion of business portfolio. Furthermore, major market players such as CBRE Group believes in improvising their customer base and their experience through their global partnerships.

List of Key Companies Profile:

• Sodexo


• CBRE Group, Inc.


• ISS A/S


• Compass Group


• Aramark


• Jones Lang LaSalle Incorporated


• Cushman & Wakefield plc.


• Tenon Group


• Johnson Controls International plc.


• AMEC Facilities

KEY INDUSTRY DEVELOPMENTS:

• April 2019: The Danish Building and Property Agency partnered with ISS A/S for its facilities management services. The agreement is valued about DKK 2 billion (Danish Krone) that aims to enhance the need of outsourced facility services


• August 2019: Aramark announced the acquisition of Good Uncle, a food delivery service application that delivers fresh ready to eat meals in the college campuses. This acquisitions has boosted up the company’s market value through technology-based solutions and services

REPORT COVERAGE

The report provides detailed information regarding various insights of the market. Some of them are growth drivers, restraints, competitive landscape, regional analysis, and challenges. It further offers an analytical depiction of the hard services facility management market trends and estimations to illustrate the forthcoming investment pockets. This market is quantitatively analyzed from 2019 to 2025 to provide the financial competency of the market. The information gathered in the report has been taken from several primary and secondary sources.

Report Scope & Segmentation