Middle East and Africa Hard Facility Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Middle East and Africa Hard Facility Management (HFM) Market revenue is expected at a CAGR of 7.7% over the next five years. The region's HFM market is anticipated to grow due to increased building activity and rising demand from the commercial and residential sectors.

Key Highlights

• The HFM sector is developing in the GCC nations. With the current oil prices encouraging capital investment, more new projects are expected to be launched. As a result, the HFM sector would eventually keep expanding. Notably, governmental and semi-governmental organizations are multiplying and are actively looking for certified foreign FM service providers for facilities. The Vision 2030 economic development strategy is aligned with the focus on building and construction. The plan aims to boost connectivity, industry, housing, and infrastructure.
• Notably, to build high-priority distributed infrastructure networks in South Africa by 2050, the Department of Public Works and Infrastructure (DPWI) introduced NIP 2050, which provides a strategic vision and roadmap. It emphasizes decentralized infrastructure with stronger linkages to local companies and communities.
• The region's facility management industry is expected to develop most rapidly in Saudi Arabia, the United Arab Emirates, and Qatar due to the rising commercial real estate demand of these countries. Also, Dubai and Saudi Arabia have many multinational corporations that led to tax reductions and created an area with a favorable economic environment. As Sheikh Hamdan bin Mohammed confirmed in June this year, the Dubai Global network seeks to increase investment, expand markets, and provide worldwide exposure to domestic businesses.
• Independent organizations, like the South African Facilities Management Association (SAFMA), aggressively promote awareness and extension of the sector to encourage future domestic FM development. As one of the first developing nations to offer local HFM standards to assist enterprises in enhancing HFM efficacy, South Africa is highlighted by the newly released SANS 1752- Strategic Facilities Management System.
• However, difficulties with operational costs and a lack of infrastructure in the area are anticipated to impede market expansion. As it is well known that money plays a crucial role in the execution of any activity or function. The main obstacles to HFM services in Nigerian tertiary institutions have been attributed to inadequate funding. Although federal programs and foreign investment activities for infrastructure development are anticipated to create commercial prospects in the region over time, the economy needs more investor confidence.
• Middle East is one of the most prominent players in the HVAC services market of all time. The expansion of the HVAC business in this suggests that service providers would have attractive opportunities in the years to come since the sale of equipment generates a significant demand for installation, retrofitting, maintenance, and repair services. As the largest market for HVAC systems, the commercial sector would provide the majority of the opportunities.
• In the initial stage of COVID-19 outbreak, Middle East and Africa's infrastructural development stalled for a certain time along with the rest of the world. However, the region is bouncing back steadily. Now, HFM services have a new importance in the entire ecosystem. With the rising demand for air purification services to the building of new work-space designs for social distancing, HFM services are one of the key areas in the infrastructurally developed regions of the Middle East.

MEA Hard Facility Management Market Trends

Rising Commercial Infrastructure in the Region

• Rising commercial infrastructure and development activities across the Middle East and some key areas of Africa are major factors supporting the facility management industry. For instance, Saudi Arabia and UAE are investing hugely in constructing ports, trains, highways, and airports. The rapid growth of commercial buildings is expected to create a demand for hard facility services for the forecast period.
• The National Infrastructure Plan 2050 was developed by Infrastructure South Africa and was submitted to Cabinet in July last year. The plan offers a strategic vision that connects the goals of the National Development Plan to doable actions and interim results. It intends to boost infrastructure spending, generate new employment through bankable infrastructure projects, and enhance the regulatory structures that support private investment in creating and financing vital economic infrastructure.
• South Africa is the most developed market among the other African nations due to a more favorable business environment and the presence of major HFM companies. One important sector that contributes significantly to South Africa's HFM market is the private and public infrastructure sector. This market results from the nation's rapid infrastructure growth and growing demand for hotels, shops, malls, and office complexes.
• Furthermore, Saudi Arabia is becoming more accessible to the rest of the world thanks to Vision 2030, a revolutionary economic and social transformation. Vision 2030 is a strategic framework to reduce the oil dependency in the region and diversify the entire economy, thereby establishing a corporate environment that is transparent, effective, efficient, and international. Saudi Arabia has committed to approximately USD 1 trillion in development and real estate projects. Infrastructure would be crucial to the Saudi 2030 Vision's success.
• The influx of capital from international businesses in various industries has contributed favorably to the rise in demand for offices, supporting the commercial real estate industry. In the past year, countries like Oman, Saudi Arabia, Qatar, and UAE have bagged stellar foreign investment for infrastructural development. A case in point, to establish itself as a digital hub, Saudi Arabia launched several technological projects in August last year totaling more than USD 1.2 billion. The country will advance in the tech sector thanks to commitments from major titans like Apple and Microsoft to establish training academies and Google's ambitions to create innovation hubs.
• According to BEA, the United States invested around USD 81.28 billion in the Middle East last year. The United States had a total direct position of USD 6.49 trillion overseas. The research shows that the country's investment in the Middle East has increased significantly in the past decade.

U.A.E Holds a significant HVAC Service Market

• UAE is one of the largest shareholders of the HVAC service market in the Middle East. The ever-growing construction sector is one of the main factors fuelling the UAE’s HVAC service market expansion. The government is making significant investments in a new and improved transportation system. Inevitably, these projects will increase demand for HVAC systems maintenance in this Middle Eastern country.
• Due to the desert and the infusion of humidity from the Persian Gulf, the nation has hot and humid weather for most of the year. It is safe to predict that HVAC system sales in the UAE are anticipated to rise in the upcoming years. Therefore, the HVAC service category will command a greater market share in 2030. This is due to the growing need for HVAC maintenance and installation services, which is brought on by the nation's need to maintain system performance, efficiency, and lifespan.
• For the UAE government protecting the environment and public health are vital goals. One of the eight pillars of the UAE General Environmental Policy, which the Cabinet adopted in November 2020, is improving the air quality. Also, air quality was one of the main concerns on the UAE National Vision 2021 agenda. By 2021, the plan seeks to increase air quality from its present level to 90%. Power and fuel usage may be greatly reduced by replacing obsolete HVAC equipment and improving the efficiency of the duct system. Also, changing the air filter regularly and upgrading the thermostat to a smart one can help substantially. These cutting-edge technological solutions can significantly reduce carbon footprint and pollutants.
• In the Post COVID times, the need for HVAC services in the country has increased. Properly configuring ducted HVAC system services can reduce recirculation and speed up the exchange of new air from outside the structure. The HVAC equipment may need to be upgraded in slightly older commercial buildings and hotels with outdated or rigid systems. Also, proper HVAC system maintenance ensures air filtration and purification, a priority in the post COVID scenario for a country like UAE, which covers commercial buildings, hotels, and entertainment centers.
• According to JRAIA, there was a 516-thousand-unit demand for air conditioning in the UAE in 2021. Figures for the observed period peaked in 2015 at around 763 thousand units but have slightly declined since then. This downward trend was only broken in 2020 with a demand surging 546-thousand-unit.

MEA Hard Facility Management Market Competitor Analysis

The Middle East and Africa Hard Facility Management (HFM) is moderately fragmented, with local and international players having decades of industry experience. ​The HFM vendors are incorporating a powerful competitive strategy by leveraging their expertise. Middle East and Africa Hard HFM companies are incorporating technologies into their services, strengthening their service portfolio. The major players are Sodexo, Inc., EFS Facilities Services Group, Emrill Services LLC, CBRE Group Inc, and Emirates National Facilities Management LLC.

• In June 2022, EmrillService announced the addition of rope access cleaning to its extensive list of services as part of the growth of its in-house operations. The business would expand its façade cleaning offerings by including Industrial Rope Access Trade Association (IRATA)-certified rope access cleaning, which would use scaffolding and building maintenance equipment to access outside windows and façades of buildings.
• In June 2022, Mace unveiled an innovation strategy to spur growth. Mace intends to devote more than 2.5% of its yearly income to developing new goods, technologies, and procedures as part of its innovation strategy. Speed and Scale laid out three distinct roadmaps for innovation over the next five years - Net-zero carbon, building to manufacturing, and digitization & information.

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