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

The Kuwait Facility Management Market is expected to register a CAGR of 9.26% during the forecast period. Facility management consists of multiple factors that influence the productivity and efficiency of organizations. The new management system standard, conforming with the best industry practices, constitutes a benchmark for developing and driving effective strategic, tactical, and operational FM principles across the country.

Key Highlights

• Moreover, Facility management (FM) includes management methods and techniques for building management, infrastructure management for an organization, and overall harmonization of the work environment in an organization. This system standardizes services and streamlines processes for an organization.
• The commercial entities cover office buildings constructed or occupied by business services, such as corporate offices of IT and communication, manufacturers, and other service providers. Due to the provision of necessary fitments, interiors, and commercial buildings, decoration, and management have gained significant importance, driving the country's commercial sector market. ​
• Kuwait's country has witnessed multiple industrial expansion activities, expanding the scope for facilities management services. For instance, the infrastructure works of many projects in Kuwait consist of electrical substations, internal roads with loading and unloading areas, networks for potable water, firefighting systems, irrigation, stormwater, and foul water, and their respective tanks. This increased demand for fire safety, electrical maintenance, technical support and maintenance, cleaning, HVAC, and other facility management services.
• Lack of technological expertise and management awareness and standards are expected to hinder the growth of the Facility Management Market. Cyber catastrophes can impact beyond just financial loss; operational and reputational harm can be just as bad, if not worse. Facility managers and IT staff can better position themselves to make informed purchasing decisions, implement targeted OT security measures, and maintain increased cyber resilience across OT environments by knowing the cybersecurity concerns surrounding building OT systems. ​
• The COVID-19 pandemic has resulted in economic turmoil owing to subsequent lockdowns. It has also impacted the facility management industry. Contrary to this, Post pandemic, the increasing awareness of cleanliness, maintenance management, and security is expected to drive the market study in the coming future.

Kuwait Facility Management Market Trends

Inhouse Facility Management Segment is Expected to Drive the Market Share

• In-house facility management refers to services provided by a dedicated resource directly employed by the client organization. In this type of facility management, monitoring and control of the performance are usually conducted under the terms of a conventional employee/employer relationship.
• In-house facility management majorly deals with recruiting specialized personnel to maintain and manage various functional attributes of a facility or area. These days most of the generic services are outsourced to third-party service providers. However, some services, such as security services or cybersecurity assistance, are still operated and monitored in-house to ensure the safety and integrity of the facilities.
• Currently, a sizeable portion is still maintained in-house to maintain tight control over the quality of the services. Industry sectors, like retail and hospitality, have partially supported in-house personnel for un-specialized services. However, organizations and industrialists in developing nations still turn to contractors for specialist work, such as lift, HVAC, and specialized MEP work.
• With a growing need arising across these sectors, skill development in such activities had to be adhered to, further leading to the development of unique delivery models. These aim to gain certified expertise, leading to the movement from workforce outsourcing to contractual service delivery.
• Factors such as increased economic activity, consumer spending, and tourism activities have increased the occupancy of large residential layouts/projects, hotels, and commercial spaces. This has, in turn, increased the need for better management of the facilities.
• According to Colliers International, the hotel occupancy rate in Kuwait City is predicted to increase by 16 percent every year through the previous year. This was a significant gain from - 5% in the third quarter of early the last year.

Public/Infrastructure Segment is Expected to hold significant share in the market

• Public/Infrastructure end-user scope covers the FM applications in the office buildings at federal, state, and local levels, justice departments, office buildings for administrative work, and other such projects. The infrastructure comprises facilities covering water and land transportation. Various buildings use services such as fire alarms and safety, energy management solutions, CCTV monitoring services, and other integrated facility management services.
• Moreover, the public sector has started demanding longer-term contracts from FM suppliers. However, lack of certainty over future labor costs and materials makes them riskier propositions, which could be a significant restraint in the players' bidding process for long-term contracts. As government-backed infrastructure projects are planned in Kuwait, there is a strong need for FM services, leading to commoditization.​ Furthermore, bundled services contracts are poised to benefit from the public spending cuts, as the public sector customers are looking to reduce the suppliers and cut costs. This is in line with the developments in various public sector bodies that continually improve their operations. ​
• Furthermore, open trade policies across Kuwait are attracting foreign investors and boosting construction activity. The construction industry is the backbone of the country's economy and is expected to develop rapidly during the forecast period. The construction industry contributes significantly to regional economic growth and development. According to MEED, As of the first half of 2022, the value of construction contracts awarded in Kuwait was about USD 24.6 billion. The total value of contracts awarded in the Middle East and North African (MENA) region was USD 62.7 billion.
• Moreover, the Directorate General of Civil Aviation, which operates Kuwait International Airport (KIA), is building a new terminal to make the airport a new regional aviation hub in the Gulf. Multiple phases are involved in building the new terminal. After the first phase, the capacity would increase to between 25 million and 50 million passengers annually, with the second phase adding about 13 million people annually. Additionally, the new terminal would considerably improve the airport's credibility as the entryway to the State of Kuwait. This new terminal is scheduled to be finished by previous year, and its development began before five years.
• Further, the ambitious Shaikh Jaber Al Abdullah Al Jaber Al Sabah International Tennis Complex, which mainly aimed to position the country as a preferred international tennis destination in the region, is now under construction, according to the Tamdeen Group, a prominent mixed-use property developer in Kuwait.

Kuwait Facility Management Industry Overview

Kuwait Facility Management Market is fragmented and has few major players that have adopted various growth strategies, such as mergers and acquisitions, new product launches, expansions, joint ventures, partnerships, and others, to strengthen their position in this market. The major players in the market are PIMCO Kuwait, Kharafi National FM, EcovertFM, Al Mazaya Holding Company KSCP, and ENGIE Services General Contracting for Buildings Company WLL, among others.

• ·July 2022 - ENGIE Solutions Kuwait provides comprehensive solutions to guide Kuwait's transition to renewable energy. Apart from providing Az Zour desalinated water, the company concentrates on Energy Service Company Models (ESCO), energy performance contracts, and integrated facilities management systems, as ventilation, air conditioning, and lighting consume 85 percent of the energy consumed by buildings in Kuwait during the summer. ENGIE Solutions provides energy efficiency solutions for several Kuwaiti facilities, including mosques, hospitals, retail malls, and five-star hotels.

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