Market Trends of Europe Soft Facility Management Industry
This section covers the major market trends shaping the Europe Soft Facility Management Market according to our research experts:
Infractructure developments is expected to bring new opportunities for the market
- The commercial sector covers office buildings occupied by business services, such as corporate offices of manufacturers, IT and telecommunication, finance and insurance, property, and other service providers. In the commercial sector, there is a need for cleaning, security, catering, support, environmental management, and others services. Infrastructure developments/ new building construction need cleaning and maintenance services.
- The growing investments in infrastructure developments are further expected to increase the region's demand for facility management services. It is quite evident with the recent developments in the region. For instance, in August last year, Google opened a new Google Cloud region in Berlin-Brandenburg with investment plans in renewable energy. The company plans to further invest in Germany's transition to a digital and sustainable economy. The company plans to invest approximately USD 1.06 billion in digital infrastructure and clean energy by 2030.
- Key players in the market are expanding their short-term contracts to long-term, which is expected to drive the market's growth. For instance, in March this year, Walton Centre NHS Foundation Trust extended its partnership with ISS UK to provide security, helpdesk, retail restaurant, patient catering, healthcare cleaning services, and hospitality across the main hospital and Sid Watkins buildings. The new contract is worth USD 3.70 million a year for three years and has the option to extend for up to two further years.
- The growth in construction activities across Europe is significantly boosting the demand for SFM services in the region. For Instance, JCDs deal with all aspects of post-construction cleaning services, from bathrooms to baseboards, vacuuming to polishing.
- According to the Department for International Trade, FDI (Foreign direct investment) projects are expected to grow at a CAGR of 3% from 2017 to 2022. Such FDI investments in construction activity would create new growth opportunities for the Soft facility management market.
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United Kingdom is Expected to Witness Significant Growth
- The soft facility management market across the United Kingdom is expected to grow at a high rate over the next five years. Given the increased penetration of soft facility management services, vendors are now increasingly focusing on using specialized services to gain a foothold in the market, which witnessed several changes due to the macroeconomic and social changes in the region.
- According to a survey conducted by the Royal Institute of Chartered Surveyors in Q2 2021, the demand for soft facility management services has increased across all sectors except retail. Further, the growth was most prominent in the healthcare sector.
- On the other hand, the United Kingdom facility management 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.
- Healthcare infrastructure developments are growing owing to the increasing number of patients and rising healthcare expenditure by the public and private players in healthcare systems. As per the data published by the OECD (The Organization for Economic Co-operation and Development), in the United Kingdom, total healthcare spending was projected to grow at an average rate of 9.7% per year during 2018-2021, reaching nearly USD 276.6 Billion by 2021.
- The outbreak of COVID-19 had a mixed business impact on soft facilities management firms. 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 market players, such as NuServe, introduced a cleaning robot known as Cobotics, creating new growth opportunities for the commercial cleaning industry.
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