Saudi Arabia Facility Management Market Research Report: Forecast (2023-2028)

Market Definition

Facility management refers to the practice of overseeing and maintaining the physical assets and infrastructure of a business or organization. This includes managing the maintenance, repair, and upkeep of buildings, equipment, and other physical assets, as well as ensuring that the facilities meet the needs of the organization's employees, clients, and customers.

Market Insights

The Saudi Arabia Facility Management Market was valued at USD 24.89 billion in 2022 and further expected to grow at a CAGR of 15% during the forecast period 2023-2028. The market is primarily driven by the rapidly increasing number of infrastructure development projects, along with growing construction activities in Saudi Arabia, which is propelling the demand for facility management services to manage the operations of buildings and facilities, including maintenance and management.

Further, Saudi Vision 2030 is increasingly focused on infrastructure development, with several construction projects in the country playing a crucial role in driving the market. In addition, the integration of the Internet of Things (IoT) and industrial automation in FM, along with employee engagement programs, are other crucial aspects driving the market.

During the COVID-19 pandemic, the market in Saudi Arabia was initially affected due to movement restrictions and work-from-home measures. However, the market saw new developments and government investments around containment zones, and later witnessed a hike in demand due to rising awareness of safety and sanitization. In the future, facility management is expected to shift towards more strategic-level services and management, fulfilling employee needs in a changing work environment.

Moreover, the numerous benefits, such as increased productivity of facilities and personnel, risk management, communication management, implementation of new business strategies, and cost efficiency, are expected to further boost the demand for such services and fuel overall market growth during the forecast period.

Market Dynamics

Key Driver: Need for Optimum Utilization of Space & Energy Resources

Facility management services play a vital role in optimizing the utilization of space and energy resources, thereby reducing operating costs and enhancing sustainability. With the mounting construction activities in Saudi Arabia, the demand for efficient space and energy management solutions is on the rise. Facility management services enable organizations to manage their space requirements effectively, utilizing available space optimally while ensuring employee comfort and safety.

Further, the adoption of sustainable practices for energy conservation and resource utilization is also driving the market in Saudi Arabia. By reducing energy consumption and carbon footprint, these services help organizations achieve their sustainability goals while improving their operational efficiency. Therefore, energy and space management are key factors propelling the industry in Saudi Arabia.

Possible Restraint: Increasing Cyber Threats & Vulnerabilities

The rising number of cyber threats and data breaches in Saudi Arabia has raised concerns about the safety of data, devices, and networks. This factor, combined with the shortage of skilled professionals and lack of standardization, may hinder the growth of the facility management market. As a result, these challenges must be addressed to ensure the market's sustainable ascension in the future.

Key Trend:  Continuous Adoption of New Technologies across the Kingdom

The facility management market is expected to benefit from continuous technological advancements, including the use of cloud-based solutions that enable remote business management and improved communication and collaboration via the internet. These advancements are likely to enhance the efficiency and effectiveness of FM services, driving market growth in the coming years.

Market Segmentation

Based on the Type:

• Hard
• Soft
• Risk
• Administrative

Among all the services, Hard Services are expected to witness the highest growth in demand during the forecast period. This is primarily due to the rapid expansion in the infrastructure sector, which necessitates facility management services to look after the physical assets of a facility and provide services such as lighting, temperature control, cleanliness, ventilation, workspace management, and restroom facilities. These facilities are necessary for the safety and welfare of both employees and customers. Furthermore, the increasing number of construction projects across Saudi Arabia is another crucial aspect projected to increase the demand for facility management services and drive the market in the coming years.

Based on Operating Model:

• In-House
• Outsourced

Out of all the operating models, the demand for the Outsourced model is expected to demonstrate significant growth during the forecast period due to its cost-effective implementation of all management services. Outsourced services are provided in single, bundled, and integrated services. Single services are mainly contractual for outsourcing service for one event, while bundled services involve 3-4 services, whether hard or soft. Integrated outsourced deamndgrowt includes all services under one roof. Outsourced services reduce potential risks and might offer an extra layer of compliance with regulatory standards. Hence, their demand is rising significantly across companies and driving the market.

Recent Developments in the Market

• In December 2022, Khidmah, a prominent facilities management and home maintenance company in the region, has acquired Pactive Sustainable Solutions, a green building enabler, and Mace Macro Technical Services, the UAE-based Hard Facilities Management Arm of Mace Group. These acquisitions align with Khidmah's expansion and growth strategy, which aims to enhance its services and extend its geographical reach while boosting operational and financial performance.
• In 2021, the Saudi British Bank (SABB) announced a collaboration with International Facilities Services (IFS), a leading facilities management company in the Middle East, to offer an integrated facilities management service for SABB's corporate clients.

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