Market Trends of Europe Facility Management Industry
This section covers the major market trends shaping the Europe Facility Management Market according to our research experts:
Commercial Buildings Segment to hold Significant Market Share
- Investment firms typically focus on the European residential or commercial property markets. Commercial buildings offer lucrative opportunities, making them an appealing form of investment in the region. As a result, it will aid the region's growth in the Facility Management Market during the forecast period. Commercial investments suggest higher cash flow potential and frequently provide better returns on investment.
- The Facility Management market is witnessing multiple partnership activities between vendors and commercial entities in Europe. For instance, this year, BNP Paribas Real Estate (BNPPRE) was selected by the Government Property Agency (GPA) as its new strategic partner for national real estate and financial services. This new strategic agreement with BNPPRE supports the agency's continuous growth, which provides quality financial management services for real estate and property-related matters. The GPA added that the organization aspired to attract top-tier strategic partners to guarantee that the agency offered a modernized, shared, sustainable, and cost-effective government estate, enabling civil servants to function effectively throughout every country and region of the UK.
- Similarly, in October last year, Siemens Energy, recently separated from Siemens AG to operate as another company, extended its collaboration with Parisian Company for the Railways and Electric Tramways industry (SPIE SA). This collaboration is for three years to ensure technical facility management for Siemen's office and production space, which totaled about 385,000 sq mt. Such long-term agreements also shape the secure service portfolio for commercial services, encouraging other companies to opt for such schemes.
- The gaining interest in establishing smart buildings and other IoT technologies provides various opportunities for the vendors in the market to introduce IoT-based facility management and accelerate the growth of smart commercial buildings in Europe. In September this year, Ericsson partnered with Nordic property technology company Kiona and Arthur D. Little to release the Connected Building Energy Management Report. The report highlighted how IoT could save about 10% of the energy costs in Europe. Also, Kiona utilizes cellular connectivity under the Ericsson IoT Accelerator program to digitalize more than 5,500 buildings, with a vision of influencing more than 55,000 commercial, industrial, residential, and public facilities in Europe.
- Such digitalization trends of turning new and old commercial buildings into smart buildings help boost property values and support facility managers and property owners. Similarly, the growth of the German facility management service attributes to the increasing demand for customized solutions for different in-house and outsourced facility management. Moreover, the rising number of commercial and residential buildings in major cities pushes the need for facility management services across the country. Rapid infrastructure development and the increasing focus on integrated facility management services will influence the studied market positively.
- Modern offices with long-term tenants remain highly sought-after by investors despite all the discussions surrounding hybrid working. The growing business acumen among industry leaders and diversification of the economy from automobile industries to other avenues will increase the demand for facility management services in the region.
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Big Data Allows Facility Management Teams to Drive for Efficiency, Sustainability, and Cost Savings
- Facility management has been evolving rapidly over the past several years, resulting in widespread changes to Europe's industry. Facility management is undergoing a paradigm shift in the region as trends related to data, disruption, evolving amenities, and new workplace concepts are gaining traction and becoming more popular.
- Further, various sectors have successfully used the outsourced FM, including the public sector, retail, professional services, healthcare, technology, logistics, manufacturing, and education. The areas that FM services look after vary widely and primarily depend on their type, the size of the company, and the sector in which it operates. It is not a one size fits all approach. Some organizations only require a single service solution provider, whereas other big organizations look for bundled services offering complete facilities management solutions. It also alters the type and amount of data generated by the client organizations, with data analytics tools like Big data helping almost all sizes of organizations and their contracts.
- According to the Q2 2022 RICS UK Facilities Management Survey, approximately 80% of the respondents reported increased investments in data analytics in the second quarter of 2022, compared to around 60% of investments in the first quarter. The survey also highlighted about 65% of respondents reporting energy management as one of the sustainability areas, recording the highest investments in facility management. It could be due to the deployment of intelligent building management systems, generating a plethora of data leveraging several sensors as a part of IoT solutions, which requires active data analytics tools like Big Data for real-time and long-term outputs.
- The survey also highlighted 35% of the respondents got contracts for bundled services in the first quarter. The trends in the European market are for a progression from in-house delivery of services to bundled services and further toward the integrated facilities management approach with single contracts. It offers a broad scope of services and longer-term contracts, adding value, driving better quality and economies of scale, and increasing the demand for outsourced services where specialist expertise is required.
- Future significant data investments by FM organizations will increase as they develop advanced and innovative technologies. The respective companies would enhance BDA investments by creating complete IoT systems, establishing analytical skills, and utilizing augmented reality and artificial intelligence (AI). FM organizations must collaborate with technology companies, consultants, and higher education institutions to scale up the applications for enterprise-level usage.
- According to Cloudscene, as of October 2022, Germany had 487 data centers, accounting for one of the highest numbers of data centers in Europe. Also, the internet literacy rate in Germany accounted for 89.6%. Such facts indicate the potential development of data processing capabilities, which is driven majorly by tools like Big Data. Facility managers ensure that a data center is always accessible and secure and operates optimally. The emergence of technologies like Big Data, etc., necessitates the deployment of ample data center storage.
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