India Facility Management Market Report – 2020: Ken Research
Facility management encompasses numerous disciplines to make sure the functionality of the built facility by incorporating people, process, place and technology. With the technological improvement and transforming living standards of people the demand of facility management has also increased to a great extent. The facility management market in India has however still been in its nascent stage covering only ~% of the working areas. A huge proportion of population still prefers in house management of servicing rather than outsourcing the services.
The facility management market in India has grown enormously at a CAGR of ~% duri g the period FY’ -FY’ . I the current scenario, people have been prepared to spend a premium to upgrade their environment and living conditions. Hence, the facility management industry has been emerged as one amongst the most booming Industries across India. It has broadly been categorized into 2 types of services: • Hard services include electro-mechanical, fire safety and business operations and management services. • Soft services include housekeeping, security, façade cleaning and business support services
I FY’ , the arket for fa ilit a age e t i I dia is dominated by soft services with the market share of 65% in the overall market revenues. The main reason for the dominance of soft services has been the higher utilities of soft services since they have been used in every day work and operation of an organization. Housekeeping and security for example have been required everyday in any organization, on the other hand hard services such as electro-mechanical services are not required every day which is why these services have a lower share of ~% in the overall market revenues of facility management in the country.
It has also been observed that out of the major cities, Bangalore has been dominating the market for facility management in the country with ~% share in overall market revenues of FY’ ei g a IT hu a ked a e or ous i rease i et absorption of commercial spaces. In 2014, a 72% increase in net absorption was recorded in Bangalore which makes it clear leader in the market. In Delhi NCR, Gurgaon, MG Road, NH8 and Noida city witnessed higher absorption while the Eastern Suburbs and Thane- Navi Mumbai witnessed higher absorption in Mumbai in 2014.
Mumbai and Delhi have been the second and third leader in the market in terms of revenues with ~% and ~% share in the market revenues respectively from facility management in FY’ .The India facility management market has been penetrated with high competition arising from presence of both international and domestic players in the market. So far, the market has been concentrated in the terms of revenues, since more than ~% of the revenues has been accrued to major 3 players namely JLL, CBRE and Cushman & Wakefield.
JLL has been leading the market with ~% share in the overall revenues from facility management services. Other players include Knight Frank, BVG, A La Concierge Services, George maintenance services and many more Market revenues from the facility management market in India are expected to e pa d to USD ~ illio i FY’ , gro i g ith a CAGR of ~% fro FY’ to FY’ . The soft facility management services has clearly dominated the facility management market majorly due to the fact that these services have been demanded in almost every commercial organization, residential apartments in urban areas and many more spaces.
Moreover the change in behavioral pattern of the population of country towards a clean and safer environment has further provided an impetus to the industry which has lead the i dustr to gro at a CAGR of ~% duri g FY’ to FY’ . India soft facility management market has earned revenue orth USD ~ illio i FY’ . The soft ser i es a ajorl be segmented into four categories namely: housekeeping, security, façade access and business support services. The major share in the market has been accrued to the housekeepi g arket orth USD ~ illio i FY’ o eri g ~% of the India soft facility services.
The second highest share has been accrued to the security services accounting for 34% of the market and has been re orded to e orth USD ~ illio i FY’ . The arket has been segmented on basis of the revenues from the sectors such as commercial, residential and hospitality. It has been observed that the commercial business parks have been growing along with other commercial spaces which have been getting highly automated with the improvement in technology and to further focus on the core business of the companies, they outsource their additional management to the facility management companies.
The soft facility management market in India has been penetrated with high competition arising from presence of both international and domestic players in the market. So far, the market has been concentrated in the terms of revenues, since more than ~% of the revenues has been accrued to major 3 players namely JLL, CBRE and Cushman & Wakefield. JLL has been leading the market with ~% share in the overall revenues from soft services. There has been a presence of a lot of low cost unorganized players prevailing in the market. These unorganized players are able to provide the services at a cheaper price hampering the margins of the organized players.
However, the revenue share of the organized players have still been as high as 70% backed by increasing awareness of people to prefer the professional services as they do not wish to sacrifice on the quality of soft services they receive. The current penetration of the facility services have been as low as ~%, thereby there is a huge scope for expansion of this sector backed by increasing number of commercial and reside tial u its. I the ediu ru , FY’ 8, the soft fa ilit management is expected to cross the USD ~ million in the revenues and for the longer run it is expected to reach USD ~ million for the revenues in soft facility management services i the ear FY’ .
The hard facility management services in India are majorly related with fundamental electro-mechanical upholding of lifts, diesel generator sets, maintenance of air conditioners and a few more. However there has been a series of technological changes which has been impacting the market and hence led to the growth of facility management market re e ues at a CAGR of ~% duri g FY’ -FY’ . The o erall revenues in the hard facility management market were re orded at USD ~ illio i FY’ .
The market for hard facilities management has been segmented into different services including electro-mechanical, operations and maintenance of building and fire safety. The electro mechanical services has clearly dominated the market for hard services with ~% share in the market revenues majorly accrued from the HVAC systems in the facilities. Despite the fact that there has been a presence of a number of players in the market, over ~% of the market revenues from the complete contract costs have been accrued to the major 3 players namely JLL, Cushman and Wakefield and CBRE.
The international presence of these players have given them a USP on the basis of higher technical knowhow which is highly required criteria in the hard facility management market in the country. The leader in the hard services market has been JLL with over ~% of the market share in terms of the revenues. JLL has been followed by Cushman & Wakefield and CBRE with ~% and ~% share respectively in the market revenues for the ear FY’ . It has also been observed that large commercial enterprises dominated the market revenues with a ajor ~% share i the arket re e ues i FY’ out of the overall hard services revenue. The other ~% share in the market revues has been accrued to the small and medium enterprises in the commercial sector.
Rising pollution and global warming is expected to impose the needs of HVAC, rising personal disposable income will make the consumers live more comfortably with power backups becoming highly important to sustain and for maintaining such complex devices there would be a need for hard facility management services. High concerns for the newer sustainability will require high demand of operations and maintenance services for resource management. Owing to these factors the revenues of the market will stimulate to gro at a e pe ted CAGR of ~% fro FY’ to FY’ a d reach the levels of ~ million in the medium term outlook till FY’ 8 a d further rise to USD ~ illio i the lo ger ru till FY’ .
Improvement in the technology with reducing time taken for a project has increased the automation of services in the country. A rising number of companies have started including mechanized or automated services in their portfolio. The major reason of its popularity has been the loaded faults and defects in the manual services. Now, for overcoming the faults, the companies have to devise the automated versions of their services. The companies have been finding different possible combinations of man, machine and consumables for achieving the best possible solution. This has helped the companies to minimize the chances of human errors.
There has been a consistent growth in the economy of the country with the increased share of service sector has led to a boom in real estate of the country. Real estate has o tri uted ~% to the ou tr ’s GDP in 2014. To make people more aware and professionally certify facility management, the International Facility Management Institute (IFMI) has been launched in the cities of Hyderabad and Bangalore to offer post-graduate courses in facility management (PGcFM) and facility management practitioner (FMP) certification courses which are certified by the International Facilities Management Association, USA.
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Source: https://www.kenresearch.com/manufacturing-andconstruction/infrastructure/india-facility-management-market-researchreport/6193-97.html
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