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

Revenue from the soft facility management market is expected to grow at a CAGR of 5.2% over the next five years. Key soft facility management companies, such as CBRE Group Inc., Jones Lang LaSalle IP Inc., Cushman & Wakefield PLC, Emeric Facility Services, and Sodexo Inc., are innovating consistently by making significant R&D investments.

Key Highlights

• Increasing demand for outsourced facility management, infrastructural developments, and investments in the private sector are some of the key drivers responsible for market growth. For instance, Saudi Arabia is one of the most prominent countries in the region concerning infrastructural development. According to the IMF, the country's GDP amounted to USD 833.54 billion last year and is expected to cross USD 1,072.44 billion by the end of the forecast period. Soft Facility management services are also expected to grow significantly as infrastructure development projects contribute to their economic growth.
• Healthcare industries are also expanding their operations worldwide, which might create opportunities for the SFM market. For instance, in April this year, Gabri Labs, a pharmaceutical technologies company, will open a facility in Dubai Science Park to locally produce medical devices. Gabri Lab's new facility will allow it to produce an initial volume of 12 million units per year, with further expansions planned by next year. The institutional development will positively impact the growth of the soft facility management services market.
• According to the Saudi Arabian Royal Commission of Riyadh City report, Saudi Arabia announced that it plans to host 7,000 new businesses. With the influx of businesses, the region is expected to see a boost in demand for SFM services. The increasing number of commercial establishments and technology integration are expected to drive the market growth.
• Key players offer soft facility management services and contribute to significant growth in the market. For instance, Sodexo offers soft services such as cleaning, catering, vending, etc. The company's services saw a significant slump due to the COVID-19 pandemic. Post-COVID-19, the demand for cleaning and catering has been expected to create new opportunities for the SFM market.

Soft Facility Management Market Trends

Infrastructural Development Continue to Open Up New Opportunities for SFM Vendors ​

• The demand for Soft Facility Management services is growing positively across the globe. Megaprojects, such as infrastructural development projects, create the need for soft facility management services. Megaprojects active in the pipeline include the Cornubia housing project, worth USD 1.5 billion. This megaproject will support industrial development in commercial, housing, and other social and public facilities, including schools, clinics, police stations, post offices, and multi-purpose. Such long-term megaprojects might further the demand for soft facility management services during the forecast period.
• Furthermore, ongoing innovative infrastructure development activities are expected to create growth opportunities for the market. For instance, in September last year, the SFM company Rekeep France signed an agreement with RATP (Régie Autonome des Transports Parisiens) to manage transport services in Paris and Île-de-France relating to cleaning services in Paris metro stations.
• Furthermore, healthcare has become one of the leading sectors, owing to the increasing number of patients and rising healthcare expenditure by the public and private players. For instance, in October last year, the construction of the Hospital of Paris-Saclay on a 45,000 m2 area in Saclay commenced with an estimated investment of USD 246 million. The new hospital includes a capacity of 416 beds, critical care centers, ten operating theatres, and many more. It is expected to complete by the next year. Establishing this new hospital might create a demand for soft facility management services.
• Long-term soft facility management services contracts will create new growth opportunities for the market. For instance, in April last year, REACT Group PLC secured a new twelve-month contract with one of its prominent facilities management customers operating in the UK national highways sector. The agreement builds upon a minor contract to provide ongoing deep cleaning services to multiple sites and add regular maintenance services to the scope.

Middle East and Africa is Expected to Witness Significant Growth

• SFM service vendors offering cleaning facility management services, catering services, additional support, landscaping services, and security services will drive new growth opportunities in the end-user industries (commercial, institutional, public/infrastructure, industrial, and other end users) in the Middle East and Africa.
• Many regional governments are focusing on commercial projects such as the construction of smart cities. In these innovative city projects, the governments are planning to implement advanced automation technologies, which are expected to propel the soft facility management market demand over the next five years.
• Several government-driven initiatives are changing the dynamics of the soft facility management market, reshaping the healthcare landscape, and creating stronger institutional setup and effective regulatory frameworks to promote private sector investment in healthcare.​ On this note, Saudi Arabia plans to invest USD 66 billion in healthcare infrastructure and boost private sector participation by 2030.
• Furthermore, automation and robotics have penetrated the maintenance, cleaning, and security applications market. For instance, in the current year, Proven Robotics introduced its first robotics technical services and training center in Saudi Arabia. The new facility will offer a wide range of services, including providing customers with original spare parts, onsite troubleshooting, in-house maintenance from qualified and technically certified teams, as well as the installation and configuration of robots. These robots used for cleaning practices will bring new growth opportunities to the soft facility management services market.
• The COVID-19 pandemic created the demand for soft services to grow faster than physical facility management services. To ensure the safety and cleanliness of buildings and occupants' circulation spaces, companies introduced a wide range of soft services focused on sanitization. For instance, last year, Polyteck Group established a deep cleaning and sanitation division to meet the growing demand from the social housing and commercial sectors for hygiene services during the COVID-19 pandemic.

Soft Facility Management Market Competitor Analysis

The global 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., Jones Lang LaSalle IP Inc., Cushman & Wakefield PLC, Emeric Facility Services, and Sodexo Inc.

In April 2022, CBRE and Microsoft established a collaboration to give major retailers and other businesses a significantly upgraded and distinct array of technological services with comparable distributed-site footprints. The enhanced facility management solution platform is expected to substantially increase customer results by enabling them to realize material cost reductions, improve operational performance, and improve communication between assets and personnel.

In March 2022, Sodexo announced the growth and extension of its relationship with University Hospitals, the company's largest integrated services hospital client in the United States (UH). Sodexo provides a wide range of services to the University of Houston, including patient nutrition and retail food (UH cafeterias, Wolfgang Pucks at UHCMC, and coffee kiosks such as Einstein's), facilities and construction management, and healthcare technology management.

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