Market Trends of Italy Facility Management Industry
In-house Facility Management Segment is Expected to Hold Significant Market Share
- In-house facility management refers to services provided by a dedicated resource directly employed by the client organization. In this type of facility management monitoring, control of the performance is usually conducted under the terms of the conventional employee/employer relationship.
- In-house facility management majorly involves recruiting specialized personnel to maintain and manage various functional attributes of a facility or area. These days most of the generic services are outsourced to third-party service providers. However, some services, such as security services or cybersecurity assistance, are still operated and monitored in-house to assure the safety and integrity of the facilities.
- A sizable percentage remains held in-house at the moment to retain strict control over the. Retail and hotel industries have supported in-house staff for non-specialized services to some extent. However, organizations and individuals in underdeveloped countries continue to use contractors for specialized tasks like elevator, HVAC, and specialized MEP work.
- Factors including increased consumer spending, economic activity and tourism activities have augmented the occupancy of large residential layouts/projects, hotels, and commercial spaces. This has, in turn, increased the need for better management of the facilities.
- The country is witnessing increasing construction in the residential sector, which would further boost the demand for in-house facility management services. According to the Associazione Nazionale Costruttori Edili - ANCE; Istat, in 2022, following a market downturn of more than 10% in 2020, Construction investments in Italy increased in 2021 and are predicted to increase again in 2022. Prior to the outbreak of the pandemic, the pace of increase in building investments had been continuously growing.
- In June 2022, the CBRE Investment Management, on behalf of a fund sponsored by the firm, announced the acquisition of a residential building in Rome's Talenti district. When complete, the residential area will consist of 225 rental units spread over seven floors and 225 parking spaces. The demand for in-house facility management is expected to increase in the market studied, owing to the advantages, including improved efficiency and cost saving, tailored services, and other such advantages.
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Commercial and Retail Segment is Expected to Hold Significant Market Share
- The commercial end-user sector mostly refers to office buildings used by suppliers of business services, such as manufacturers' corporate offices, IT and communication businesses, and other service providers. Retail facilities management refers to making a company's location hygienic, secure, and welcoming while boosting the brand and simplifying things for the clients. Cleaning floors, restrooms, and window displays, assembling eye-catching retail displays, and occasionally completely renovating the facility or shop floor constitute the retail facilities management process. These tasks vary based on the requirements of the client.
- The country's commercial building industry has seen significant investments, propelling the facility management business. Various investment firms have hired real estate management businesses to handle their real estate investments. According to CBRE Italy, the volume of investments in Italy in 2022 will be Euro11.7 billion, the second-best outcome ever, owing to a robust post-Covid rebound powered by exceptional Logistics performance and revived interest in Offices.
- In addition, according to JLL, office leasing take-up grew in both Rome and Milan. Corporate tenants continue to seek flexibility with novel leases, while workers want a level of freedom in their working life. Milan achieved 506,000 sq. m. in 2022, an increase of 42% year on year and one of the most substantial results among European markets. In Rome, take-up climbed, totaling roughly 150,000 sq. m. (+5% YoY). As the due date approaches in 2023, the market-wide trend in company consolidations, space reduction, prime space relocating, and an increased focus on 2030 sustainability targets are anticipated.
- In November 2022, Macquarie Asset Management bought an office property in downtown Milan for roughly EUR 119 million from an Italian real estate trust. The funds were invested as part of a managed fund. The historic building in the Porta Romana area was formerly held by All-Star, a fund administered by Kryalos SGR and backed by Blackstone funds. Such trends and advancements are projected to boost the country's need for facility management.
- The growing retail and construction industry, increasing investment in the commercial sector, and growing smart buildings in the country are expected to drive the facility management demand during the forecast period. According to the European Real Estate Association, the value of commercial real estate in Italy was predicted to be around USD 909 billion as of the last month of 2022. Italy was Europe's fourth-largest commercial real estate market that year. The gradual growth in the commercial and real estate sectors would drive the market studied.
