The Europe Facility Management Market is expected to grow at a CAGR of 3. 72% over the forecast period 2021 to 2026. Europe is supposed to be one of the biggest outsourced markets for facility management services in terms of maturity and sophistication.
New York, Nov. 22, 2021 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Europe Facility Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" - https://www.reportlinker.com/p06177376/?utm_source=GNW
Europe is one of the biggest outsourced markets for facility management services in terms of development and sophistication. The region’s facility management industry operates with integrated contracts provided by significant vendors across continents and borders, and small local players focus on single contracts and single-service solutions. However, given the dynamics occurring across the region, there are increasing opportunities to leverage facility management and corporate real estate in new ways.
Moreover, facility management (FM) includes management methods and techniques for building management, infrastructure management for an organization, and overall harmonization of the work environment in an organization. This system standardizes services and streamlines processes for an organization.
Across the last decade, several service vendors operating in the region have been focused on expanding their presence to leverage the increasing demand for facility management, especially with the recent trend favoring the outsourcing of non-core operations. Further, the United Kingdom has been witnessing increased opportunities to leverage facility management and corporate real estate in innovative ways, given the dynamics across the country.
In terms of the end-user demand, the public sector’s contribution toward the facility management market in the United Kingdom is more significant than in any other part of Europe, primarily driven by the government’s constrained budgets that lead to the continuous outsourcing of essential facility management services.
Considering the market for European facility management, it has been subjected to moderate growth due to the rise in demand for people with an improved requirement. This scenario is projected to bolster the development of the market during the forecast period. The ongoing pandemic has resulted in steady market growth in the region. However, the pandemic has resulted in limited production, leading to a sharp decline in business inputs. ?
The outbreak of COVID-19 has had a mixed business impact on facilities management firms. The restrictions on the movement of people resulted in a decline in project work and a decreased level of activity across many customer sites. Significant players in the market, such as Mitie, CBRE Group, and others, were adversely affected due to the pandemic lockdown.
Key Market Trends
Commercial Buildings Segment to hold significant share in the market
In Europe, investment companies usually decide to specialize either in the residential or commercial property market. As commercial investments suggest higher cash flow potential and often provide better returns on investment, the commercial buildings segment offers lucrative opportunities, making them an attractive form of investment in the region, consequently boosting the Facility Management Market’s growth in the region during the forecast period.
The Facility Management market is witnessing multiple partnership activities between the vendors and the commercial entities in Europe. For instance, in September 2020, Hearst UK, a publisher of brands such as Harper’s Bazaar, ELLE, Cosmopolitan, and Esquire, collaborated with Churchill Group and Pareto FM for facility services in its offices in Europe. Under the terms of the agreement, the Portfolio by Churchill may oversee cleaning and event management activities, with Pareto assuming responsibility for delivering all mechanical, electrical, and fabric-related planned and reactive maintenance services and project management services.
The gaining interest in establishing smart buildings and other IoT technologies provides various opportunities for the vendors in the market to introduce IoT-based facility management and accelerate the growth for smart buildings in Europe. For instance, in January 2021, Climate partnered with Wattsense to introduce LoRaWAN devices and an end-to-end energy efficiency solution to help facility managers property owners to optimize and control energy consumption and adapt to smarter technologies with IoT integrations.
The German facility management service growth is attributed to the increasing demand for customized solutions for different in-house and outsourced facility management. Moreover, the rising number of commercial and residential buildings in major cities is further pushing demand for facility management services across the country. Additionally, rapid infrastructure development and the rising focus on integrated facility management services are anticipated to influence the studied market positively.
The market is witnessing multiple strategic acquisitions between the market leaders in Germany to capitalize on the increasing demand for digital facility management solutions. For instance, in December 2020, EQT VII agreed to sell Apleona, a leading European facility management services provider in DACH, to PAI Partners for a transaction worth approximately EUR 1.6 billion. The company supports clients with a wide range of services, amongst others, with the goal of reducing buildings’ energy consumption and CO2 emissions, and it has created a strong customer base in the region.
Modern offices with long-term tenants remain highly sought-after by investors despite all the discussions surrounding hybrid working. The growing business acumen among industry leaders and diversification of the economy from automobile industries to other avenues is expected to increase the demand for facility management services in the country.
Big Data Allows Facility Management Teams to Drive for Efficiency, Sustainability, and Cost Savings
Facility management has been evolving rapidly over the past several years, resulting in widespread changes to Europe’s industry. Facility management is undergoing a paradigm shift in the region as trends related to data, disruption, evolving amenities, and new workplace concepts are gaining traction and becoming more popular.
The trends in the European market are for a progression from single services to bundled services and further toward the integrated facilities management approach. This offers a broad scope of services and longer-term contracts, adding value, driving better quality and economies of scale, and increasing the demand for outsourced services, where specialist expertise is required.
The outsourced FM has been successfully used in various sectors, including the public sector, retail, professional services, healthcare, technology, logistics, manufacturing, and education. The areas that FM services look after vary widely and primarily depend on its type, the size of the company, and the sector in which it operates. This is not a one size fits all approach. Some organizations will only require a single service solution provider, whereas other big organizations will be looking for a bundled services offering or complete facilities management solution.
Vendors in the region have been providing bundled services to their customers that offer multiple advantages for clients. For example, PTSG, through its bundled services, provides a multi-disciplinary capability for clients. This often gives them a complete specialist services solution, with the following benefits: one single point of contact for all the services, a more focused approach toward the servicing of their assets, keeping the building(s) in first-class operational order, and associated cost savings. By offering a bundled service, the company can ensure compliance with all services provided by PTSG.
According to The Q2 2021 RICS UK Facilities Management Survey, approximately 28% of the respondents believed that the Integrated FM sector would witness the highest growth in the next 12 months in February 2021. The response rate witnessed a slight decrease as 27% of the respondents believed Integrated FM to witness the highest growth in May 2021. In Q1 2021 and Q2 2021, bundled FM and in-house services received a higher percentage of responses for growth rate. However, the integrated FM service was significantly ahead of the single FM service in the survey.
The Europe Facility Management Market is highly competitive with the presence of diverse firms of different sizes. This market is anticipated to encounter a number of partnerships, mergers, and acquisitions as organizations continue to invest strategically in offsetting the present slowdowns that they are experiencing. The clients in this region are employing FM services to increase the ease of their business operations. The market comprises key solutions and service providers, such as CBRE Group, Mitie Group PLC, Emcor Facilities Services WLL, Interserve Limited, and G4S Facilities Management UK Limited.
October 2020 - ENGIE launched a new zero-carbon home retrofit model. With UK households accounting for more than a quarter of the entire UK CO2 emissions and half the market achieving an EPC rating of D or less, radical steps are required if the United Kingdom is to achieve a mass reduction in greenhouse gas emissions by 2050. The new offer utilizes the savings generated from the improvement works together with existing revenue streams and government incentives, including Energy Companies Obligation (ECO), Renewable Heat Incentive (RHI), and Grid Balancing Agreements to help finance the upfront costs of the works.
February 2021 - CBRE Group acquired a 35% stake in Industrious, a flexible workspace provider, ahead of a potential IPO in 2021. CBRE, based in Dallas, paid almost USD 200 million in cash for primary and secondary shares and is transferring its flexible workspace brand Hana, which has ten locations in the United States and the United Kingdom.
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