GCC HVAC Rental Market Research Report: Forecast (2023-2028)

Market Definition

HVAC refers to Heating, Ventilation, and Air Conditioning. It includes all the systems associated with the control of air temperature, humidity, and purity, such as air conditioners, heating equipment, etc. The rental services for HVAC systems include renting overall systems & the parts associated with them for both short- & long-term commercial, residential, and industrial purposes. The demand for such services generally comes from labor accommodation at construction sites, events & exhibitions, and commercial spaces as a backup air conditioning system in case of failure or breakdown of installed systems.

Market Insights

The GCC HVAC Rental market is projected to grow at a CAGR of around 3.48% during the forecast period, i.e., 2023-28. This is owing to the presence of hot & harsh climatic conditions in the region, which makes air cooling a requirement for all the inhabitants. This makes HVAC systems essential for maintaining comfortable indoor environments in residential, commercial, and industrial settings, which is further supporting the market for rental HVACs in the region.

Also, the continuous engagement of governments of countries such as the UAE, Saudi Arabia, Oman, etc., in diversifying their revenue sources in the backdrop of volatility involved in the oil & gas industry is resulting in the infrastructural development of different sectors such as manufacturing, healthcare, tourism, hospitality, etc.

Moreover, regional countries are witnessing an increasing influx of expatriates in response to the creation of employment opportunities for both blue-collar & white-collar workers, combined with ease of visa availability for students & professionals, further soaring up the rate of construction in the region. This would further scale up the demand for the equipment in the upcoming years owing to the large requirement of rental air conditioners at the time of construction for labor in GCC countries.

Further, initiatives taken by governments of countries such as the kingdom of Saudi Arabia, Qatar, Kuwait, The UAE, etc., to lure investments in their respective nations are resulting in a heightening number of national and international events, exhibitions, and fairs across GCC. These events are related to a varied number of sectors, such as automotive, healthcare, agriculture, textile, etc., and witness a large number of tourists, students & business professionals, and owners. The requirement of air conditioner systems temporarily for such exhibitions & events would thus surge the revenue for HVAC rental companies in the anticipated period.

Thus, the ongoing economic developments in regional countries, along with the expansion planned under various government visions such as Saudi Vision 2030, Abu Dhabi Vision 2030, Kuwait Vision 2035, Oman Vision 2040, etc., would also create a prosperous growth prospect for the rental market of HVAC systems in the GCC region during the forecast period, 2023-2028.

Market Dynamics

Key Driver: Rising Infrastructure Development Projects to Support the Market

The GCC region witnessed considerable growth in construction activity owing to the development of transportation, commercial & residential spaces, etc. The major economies of the region, such as the UAE, Saudi Arabia, Kuwait, etc., are more focused on constructing commercial buildings like airports, metro malls, and others. Therefore, the rise in construction activity is driving the market for rental HVAC across the region. Furthermore, the accelerating tourism in the countries such as the UAE, Egypt, Saudi Arabia, etc., has led to the construction of commercial buildings such as lavish hotels, retail malls, resorts, and various others.

Besides, the governments of the countries like the UAE, Saudi Arabia, and Oman, among others, have been extensively involved in boosting tourism by establishing recreational hubs, luxurious malls, etc., and also by preserving & maintaining historical monuments as well as cultural heritage sites. Therefore, the growing construction of commercial buildings in the GCC region will boost HVAC rental demand during the forecast period.

Possible Restraint: Dependency on Import to Disrupt the Market Growth

The GCC Rental HVAC market is highly dependent upon efficient & reliable imports & is vulnerable to disruptions in the global market. Any disruptions to shipping & transportation, such as natural disasters, strikes, or political instability, impact the delivery of HVAC equipment & spare parts to GCC countries, leading to delays & increased costs for companies. Thus, the dependency of HVAC rental companies on imports from countries across the globe may hinder the growth of the market in the upcoming years.

Growth Opportunity: Increasing Number of Pilgrims in the Region to Support the Market for Rental HVAC Systems

GCC region observes a high number of religious tourists owing to the presence of some of the holiest pilgrimages such as Hajj, Umrah, etc. in Saudi Arabia. These tourists also visit other countries in the region to cover different religious mosques and places such as The Sheikh Zayed Grand Mosque of UAE, etc. To accommodate the increased number of pilgrims during Ramadan, regional governments provide additional services and facilities, including extended shopping hours, special Ramadan tents for Iftar meals, and additional public transportation services.

This also includes providing temporary air cooling equipment for camps arranged for such tourists. Increasing focus of the government on accelerating the number of such pilgrims in the region after the pandemic to make the region a religious tourism hub would scale up the demand for the HVAC rental market in GCC in coming years.

Key Trend: Emergence of Long-Term Rental Contracts in the GCC Rental Market

HVAC rental customers in the GCC countries to secure reliable and cost-effective HVAC solutions for extended periods have started indulging in long-term rental contracts in recent years. These contracts allow customers to avoid the high capital expenditure associated with purchasing HVAC equipment, as they only have to pay a fixed rental fee for the duration of the contract, which is why customers are seeking to secure their HVAC needs for several years, rather than just renting equipment for short-term projects. Further, it also helps customers to manage their cash flows more effectively and frees up capital for other investments. Thus, these long-term contracts are widening the revenue prospect for companies in the GCC region.

Market Segmentation

Based on Type:

• Room Air Conditioners
• Centralized Air Conditioners
• Others (Heating Equipment, etc.)

Among these, Centralized Air Conditioners created significant demand for rental HVAC equipment in GCC in the historical years owing to the vast short-term requirement of such air conditioners in different events, exhibitions, and conferences organized in all the countries across the region. In addition, a prerequisite of such systems in halls and large spaces to provide comfort to players and audiences in an increasing number of sports events & cultural programs in countries such as Qatar, and the UAE is widening the market for rental HVAC systems in the region.

Further, the need for such systems in commercial and public spaces such as hospitals, complexes, stations, manufacturing, and industrial units, along with the increasing number of economic, social, and cultural programs, and business & international conferences, would generate the rental HVAC system demand in the forecast years.

Based on Application:

• Construction
• Events
• Breakdown of Equipment

Of these, Construction acquired a considerable share in the GCC Rental market in the past years on account of the large-scale infrastructural development in countries such as the UAE, Saudi, Qatar, Kuwait, etc. The presence of a large number of laborers at economical prices to work at these construction sites, along with the hot & humid climatic conditions of the region generated the need to provide air-cooling equipment for such labor. The availability of rental HVAC solutions costs it less for builders to fulfill the air conditioning needs at the accommodation for such labor, making the countries present across GCC the major market for rental HVAC equipment. Furthermore, the increasing rate of construction in the region would drive the demand for this segment in the upcoming period.

Regional Projection

Geographically, the market expands across:

• The UAE
• Saudi Arabia
• Qatar
• Kuwait
• Oman
• Bahrain

Among all the countries, the UAE witnessed a huge demand for rental HVAC systems during 2018-2022. This is due to the rapid urbanization and infrastructure development in the country which increased the demand for HVAC rental solutions in the construction sector. Also, the UAE has become a hub for international events and exhibitions, which require temporary HVAC solutions to ensure attendee comfort.

In addition, the UAE is a major producer & exporter of oil & gas, and many oil and gas operations require temporary HVAC solutions to maintain safe and comfortable working conditions for employees. Further, increasing focus on energy efficiency & on reducing energy consumption would drive the demand for HVAC rental solutions that are both energy-efficient & cost-effective in UAE in the forthcoming period.

Recent Developments by the Leading Companies

• In 2022, Andrews Sykes Climate Rental expanded its rental fleet by introducing dehumidifier rental services for its customers. This was done to incorporate modern technologies to provide customers with enhanced performance but lower operating costs.

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