Spain Facility Management Market | Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Spain Facility Management Market is expected to register a CAGR of 5.29% over the forecast period (2022 - 2027). The market is majorly driven by increasing private investments in real estate, growing facilities in the pharmaceutical industry, and hygiene factors in educational, government, and commercial properties. This has increased the contractual services in cleaning and maintenance services.

Key Highlights

• According to European Commission, the Spanish education system has a decentralized management and administration model. Most of the investment in education is public, representing more than 87% of the total spending on education in the case of levels that are lower than higher education and more than 66% in tertiary education.
• Such large-scale investments under government undertaking increase the facility management services to be outsourced to private players. For instance, in November 2020, Interserve Group Limited, the international support services, construction, and equipment services group, received a GBP 3.6 million contract to deliver cleaning services and pest control at the campus of Autonoma University of Madrid.
• The market is witnessing multiple strategic acquisitions between the market leaders in Spain. For instance, in October 2020, DOMINION acquired FAMAEX, the Spanish start-up, to revolutionize the maintenance and repair services of commercial stores and real estate. With this technological platform through which, any company or facility manager could request and schedule a service.
• The increasing investments in the healthcare sector with new production facilities would further help in driving the growth of the studied market. For instance, In May 2021, BD (Becton, Dickinson, and Company) is building a USD 200 million high-tech manufacturing facility in Zaragoza, Spain, to support the production of pre-fillable syringes for vaccines and other biologics.
• Further, the outbreak of COVID-19 has had a mixed business impact on facilities management firms in Spain. The restrictions on the movement of people resulted in a decline in project work and a decreased level of activity across many customer sites. Significant players in the market, such as CBRE Group, and others, were adversely affected due to the pandemic lockdown.

Key Market Trends

Growing Investments in real estate and pharmaceutical industries

• The Spanish economy has witnessed substantial improvement in 2021 post the pandemic's catastrophic shock. According to Sociedad de Tasacion, the sale of dwelling homes in the country reached to 676,775 units and showed an increase of 38.1% in 2021.
• Moreover, according to data from the Spanish Land Registry (Registradores), the proportion of foreign buyers across Spain as a whole increased by 0.23 % from 9.52% in the first quarter of 2021 and 9.75% in the second quarter of 2021, suggesting that international buyers are beginning to return.
• The real estate vendors in the market have been investing in acquisitions for scaling in the real estate sectors. For instance, in September 2021, Round Hill Capital announced the acquisition serviced apartment asset in Valdebebas (Madrid) for an investment of EUR 30 million. Therefore such developments in the country is driving opportunities for facility management in the country.
• The investments in the Pharmaceutical industry increased during the pandemic. For instance, in April 2021, the government of Spain announced that the researchers would start studying the effects of mixings two vaccines. In addition, the trial is expected to draw a sample of 600 people of all ages from across Spain to determine if the Pfizer vaccine can be given to patients who have received the AstraZeneca Vaccine dose within 28 days.
• Furthermore, various acquisitions from the key players of CDMO platforms are exercising mergers and acquisitions of pharmaceutical manufacturing sites to better research and develop COVID-19 vaccines. For instance, in January 2021, the company Siegfried announced the acquisition of pharmaceutical manufacturing sites from Novartis in the Barcelona region. The company intends to transform the formerly captive manufacturing sites into flexible and competitive customer-facing CDMO platforms offering their services to various customers worldwide. Such initiatives driving opportunities for facility management in Spain.

Institutional Sector is Expected to Grow Significantly

• The country has been witnessing the delayed expansion of institutional sectors due to a six-year-long political and financial tensions followed by the impact of COVID-19. However, in September 2021, Spain’s council of ministers awarded Madrid’s Museo Nacional del Prado with USD 42 million to compete for the anticipated expansions. The investment will allow institutions to renovate the neighboring Hall of Realms by 2024. Therefore such investments are expected to drive opportunities for facility management in the institutional sector.
• Further, the sector outsources the facility management mainly for hard facility management, which deals with wiring, elevators, plumbing, heating, and cooling. However, institutions also outsource soft facility management services such as security and ground keeping.
• With increased construction and renovation activities in the institutional sector, the demand for facility management is witnessing growth. For example, EdTech Aprende Institute raised USD 22 million to expand in Spanish-speaking markets, and Valor Capital Group raised USD 27 million in financing to establish a presence in Spanish-speaking markets.

Competitive Landscape

Spain FM market is considered nearly concentrated as few local and international players are present with significant years of industry experience. The FM companies are incorporating technologies into their services, which are adding strength to their service portfolio. Moreover, major players 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.

• October 2021 - Ferrovial announced that it reached an agreement to sell the infrastructure Service business in Spain to Portobello Capital for approximately EUR 186 million. According to the company, its infrastructure service business in 2020 accounted for a revenue of EUR 822 million and is expected to witness revenue growth post the acquisition by Portobello Capital.
• October 2021 - CBRE group announced the acquisition of Bovis Spain and Portugal, which is one of the leading project management and consultancy firm serving clients across multiple sectors. Such acquisitions are expected to bring opportunities for the company's facility management sector in Spain.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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