Behind-The-Scenes Boom

As infrastructure and real estate investments surge in Gulf, the facilities management (FM) industry has grown in tandem.

According to a report by the Middle East Facility Management association (MEFMA) around $21.8 billion was spent on facilities management in the GCC during 2012. The bulk of the expenditure was carried out in the UAE, Saudi Arabia and Qatar, research has shown.

But the growth of the FM industry has not been without challenges. The industry is still stabilising itself in a region emerging from the effects of the global economic meltdown in 2009.

“in the GCC, the facilities management industry took off only in 2006 and is still to come of age,” says Ali Hassan Abdulla Al Qattan Harmoodi, director, business development, Etisalat Facilities Management.

“Before that, FM was an in-house function. More specific to the uaE, which is the most mature GCC market, there are new entrants into the local FM landscape but the need is for end-to-end service providers.”

Much like other industries, the FM sector is dependent on related sectors such as construction and real estate to develop itself.

“The FM sector is dependent on construction, and as the property market here in Dubai goes from strength to strength, the FM sector will also grow with it,” says Jaafar Shubber, senior project manager, FM Expo 2014.

“We have to continue to ensure that the right standards are in place and that we remain ahead of the curve.”

lessons learned

The industry, which had to keep up with the maniac pace of developments during the boom period in 2007, had to reassess itself in the years of recession where construction and real estate sectors took a nosedive. But the industry has learnt its lessons and is now establishing few ground rules for operation.

“What happened earlier is that we waited until a building was finished to get involved but now we are asking to be involved as early as possible from the design stage,” says Ali Al Suwaidi, MEFMA board member.

“We also need more facility management consultants who are experts in operations, who know the old stories and mistakes, can share it with the architect, consultant and the developer and try to close this gap between design construction and operation.”

Suwaidi emphasised that involving the FM sector in the early stages of a building could save developers unnecessary expenses later on.

“People who build the building will never think about the operations and build it as per the designs. But if designs have gaps that hinder operation, they will have to modify their design. This is what we want to avoid.”

Moreover, organisations such as the MEFMA help in bridging the training gap in the FM industry by making it affordable and also act as a knowledge-sharing hub for local experts, fuelling the growth of FM.

But experts say that the industry still lacks adequate regulations and benchmarks, which could improve performance.

“More FM companies are entering the UAE market but not all are sufficiently equipped to meet the elevated benchmarks of the global FM industry,” said Harmoodi.

“Smaller players, in particular, may not be adequately capitalised, may have insufficient expertise or limited staffing ability. This may compromise on quality of delivery. What could help is a system of regulations and checks to make sure all FM companies are up to the mark.”

But as governments and companies continue to invest in infrastructure and buildings, experts emphasise that sustainability is the buzzword in the region.

“The recurring theme around the globe today is sustainable development, and this is also being reflected increasingly in the way we build and maintain buildings,” said Harmoodi.

“The objective is to make buildings greener, proactively conserve and recycle resources, reduce wear and tear, and bring down maintenance expenses.

“This is especially important as urban buildings can account for up to 75 per cent of a city’s greenhouse emissions and a huge share of its water consumption. With a combination of good FM and an efficient energy and water management programme, buildings can cut consumption of these resources by as much as 30 per cent.”

Shubber added that there is always a risk of the FM firms overlooking the importance of sustainability as the industry begins to boom and that should be avoided.

MANAGING PROCUREMENT

The GCC’s FM sector is forecast to reach $9 billion in 2014, predicts Frost and Sullivan. But as the region readies itself to host mega events, the market is also estimated to become extremely competitive and cost control could be a tipping point.

Experts say that this has also brought into focus the need to procure in a smarter way.

“Today, FM companies in the Middle East are still procuring the old fashioned way,” says Steven Speter, managing director of 36-S, a global procurement solutions provider.

“The process involves filling out paper forms and chasing after internal approvals to procure products. As a result this creates a huge delay in the lead-time for the sites to have necessary products delivered on time.

He added that without a proper procurement infrastructure FM companies are leaking cost and also putting service quality levels at risk.

“We have developed a platform that, among numerous benefits, has proven to reduce the lead time in getting products delivered to the sites,” explained Speter, “as the entire procurement process is done online or using a mobile application, enabling approvals to be made real time.”

But as the region prepares to host mega events such as the Expo 2020, the FM sector will receive a much-needed push forward, according to Jaber Al Ali, the acting general manager of Emirates Facilities Management.

“The sheer scale of the event may mean that a consortium of FM companies will have to work closely together. Projects like airports, roadways, parking lots, ports and railways will also call for more FM,” he explained.

“Consolidation may also be on the cards as smaller players who face the option of either teaming up with bigger players or going bust. Such factors may re-arrange the UAE’s FM landscape.

“An equally vital influencer would be Dubai’s push towards being a smart city. FM companies will need to keep up with automation technology that may be used within the facilities, which may change the job profile of strategic FM personnel.“