Latin America Soft Facility Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The soft facility management market in Latin America is estimated to register a CAGR of 5.0 % over the next five years. Several private and public projects, including construction, infrastructural, energy projects, etc., are creating a massive demand for the soft facility management market.

Key Highlights

• The Key players in the soft facility management market include CBRE Group, Inc., Cushman & Wakefield plc, Sodexo, Inc., Ecolab Inc., and ISS A/S are offering cleaning facility management services, catering services, additional support, landscaping services, and security services that will drive new growth opportunities in the end-user industries (Commercial, Institutional, Public/Infrastructure, Industrial) across Latin America.
• An increase in the development of commercial facilities, along with significant investments in infrastructure projects such as hospitals, airports, and educational institutions, are expected to drive market growth. Increasing awareness of the benefits of soft facility management services is expected to fuel the market's growth.
• According to the United Nations Conference on Trade and Development (UNCTAD), Mexico was the 10th largest destination for foreign direct investments, with approximately USD 32 billion in 2021, an increase of USD 4 billion from 2020. Also, the value of greenfield projects announced increased by 43%. Growing investments in greenfield projects are expected to drive the growth of the market studied.
• The spread of COVID-19 has forced the mass closure of workspaces and the implementation of work-from-home policies in most industries, especially in the corporate buildings of the IT and telecommunication sector, which negatively affected the market. However, for some businesses, the new normal initially may mean virus-proofing their offices through short-term fixes, new working patterns, and long-term design upgrades that put hygiene at the core of workplace planning. This may positively impact the region's soft services, such as COVID-19 cleaning services.

Key Market Trends

Commercial End User is Expected to Hold a Significant Market Share

• The government's commercial projects in the Latin America region focus on the construction of smart cities and the implementation of advanced automation technologies are expected to propel the demand for the soft facility management market over the next five years.
• Moreover, the rise in foreign direct investments for infrastructure developments and the growing construction of commercial buildings creates enormous growth opportunities for the soft facility management market. For instance, in May 2022, Equinix acquired four data centers from EmpresaNacional De TelecomunicacionesS.A. ('Entel') in Chile. Equinix also signed an agreement to acquire another data center from Entel, with all five data centers holding an enterprise value of USD 735 million. Equinix operates eleven International Business Exchange (IBX) data centers in Brazil, Mexico, and Colombia.
• According to the United Nations Conference on Trade and Development (UNCTAD), Mexico was the 10th largest destination for foreign direct investments, with approximately USD 32 billion in 2021. Furthermore, the increasing FDI investments and new opportunities from infrastructural projects across the Latin America region are further anticipated to propel the soft facility management market demand.
• The government infrastructure initiatives using private capital in Mexico were operational as of March 2022. 113 projects were currently in the implementation stage. Such infrastructure development projects will increase the need for soft facility management services.

Brazil is Expected to Witness Significant Growth

• The Brazilian soft facility management market is driven by an increasing number of commercial establishments such as MNCs and local corporations, rising technological integration resulting in increased efficiency, and rising FDI (Foreign direct investment) investments in the country. This has increased the demand for soft facility management services in the country.
• According to the United Nations Conference on Trade and Development (UNCTAD). Brazil was the 6th largest destination for foreign direct investments, with approximately USD 50 billion in 2021, an increase of USD 22 billion from 2020. Also, the value of greenfield projects announced increased by 3%, and the number of international project finance deals increased by 32% in 2021.
• In addition, ongoing infrastructure development activities, a rising real estate sector, and a surge in demand for energy-efficient green buildings are expected to add growth to the soft facility management market. For Instance, Shizen International Inc. (Shizen International) has signed an agreement to construct a solar farm for 17 locations in Brazil for a total of 33.4 MWp will be completed this year.
• Brazil's construction market reached USD 73 billion in 2021. This indicates that the construction industry is expected to grow further, and the demand for the soft facility management market is expected to grow over the next five years.

Competitive Landscape

The Latin America soft facility management market is moderately fragmented due to ongoing partnerships and recent advancements in the market. Some major players in the market studied include CBRE Group, Inc., Cushman & Wakefield plc, Sodexo, Inc., Ecolab Inc., and ISS A/S.

• November 2021 - CBRE Group, Inc has a strategic partnership with Townsend Holdings Limited. Turner & Townsend serves customers across 46 countries with program management, cost consulting, project management, and advisory consulting services. Real estate, infrastructure, and natural resources are the three business segments.
• February 2022 - Sodexo On-site achieves Facility Service Management System Certification for Facilities Management (NBR ISO 41001:2020). The certification process took place within the Administration and Provision of Hygiene Services. It was conducted by one of the most recognized certification bodies in the country, Bureau Veritas. Sodexo On-site is one of the first companies in Brazil and throughout Latin America to receive certification to the standard.

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