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The Latin America facility management market is estimated to register a CAGR of 7.78 % from 2022 to 2027. The market is influenced due to various factors in the post-pandemic world, with corporate and businesses focusing more on customer and employee well-being than ever. Providing better employability and customer experience pushes the service providers to incorporate new technologies like 3D printing, Artificial Intelligence, and Machine Learning.
- Latin America has witnessed a rise in the count of commercial establishments in significant countries, including Brazil and Mexico. The increase in commercial buildings needs advanced management facilities to provide decent work culture. Thus, it requires in-house or outsourced management facilities like security, maintenance, cleanliness, etc., to ensure peace of mind and a favorable work environment.
- The companies focus on enhancing the sustainability quotient of their facilities and establishments is increasing the demand for efficient and sustainable facility management. The focus on decreasing carbon emissions and footprint demand advanced technologies to ensure the efficient disposal of wastes. Several measures during the construction and further operation of buildings are defining functions, including reducing the use of water, renewable energy resources, choice of materials, transport and mobility alternatives, etc.
- Several certifications ensure benchmark operations of buildings and facilities, setting standards for the facility management companies to ensure optimum delivery of services. For instance, LEED (Leadership in Energy and Environmental Design) is one such certification confirming green buildings. In February 2022, according to USGBC (United States Green Building Council, creator of LEED), Brazil and Mexico were placed at 7th and 10th positions respectively in the LEED rakings 2021, amount 180 other countries. Such ranking in a high number of projects spanning over large areas is possible with the construction and further operations carried out by highly specialized facility management firms, creating more scope for such service providers.
- The COVID-19 pandemic impacted the industry as the international lockdowns had shut down the workplaces, except for healthcare facilities. Thus, facilities management service providers had to shut down many offices, temporarily and permanently, to compensate for the losses. However, the need to invite employees "back to the office" is driving the market. The companies are working aggressively with the service providers to offer better work culture to attract clients to the offices from the comfort of their homes. The ongoing developments with other factors will help facility providers recover and evolve as businesses.
Scope of the Report
Facility management (FM) is a profession that incorporates many disciplines to ensure functionality, safety, comfort, and efficiency of the built environment by integrating people, process, place, and technology. FMs contribute to the business's bottom line through their responsibility for often maintaining an organization's most significant and most valuable assets, such as property, equipment, buildings, and other environments that house personnel, productivity, inventory, and other elements of the operation.
Facility management services involve building upkeep, utilities, maintenance operations, waste services, security, etc. These services are further divided into hard facility management services and soft facility management services spheres.
Both in-house facility management and outsourced FM services are considered in the scope. The integrated facility management service (IFM) market, along with single and bundled services, is included in the outsourced FM services segment.
The Latin America Facility Management Market is segmented by Type of Facility Management (In-house Facility Management and Outsourced Facility Management (Single FM, Bundled FM, Integrated FM)), by Offering type (Hard FM, Soft FM), and by End-user (Commercial, Institutional, Public/Infrastructure, Industrial).
|Segmentation - By Type|
|Inhouse Facility Management|
|Segmentation - By Offerings|
|Segmentation - By End User|
|Segmentation - By Geography|
|Rest of the Latin America|
Key Market Trends
Data Center Facilities to Drive the Market
- The introduction of cloud-based and other data-driven new-age technologies in Latin American countries leads to new data center establishments. The local access to data storage and processing platform will boost many businesses for their operations based on the internet and online media. Thus, the region is all set to witness the influx of more data companies, creating significant demand for building and managing these facilities efficiently.
- The foreign direct investments from multinational companies to expand their data facilities are paving the way for facility management companies to support their operations. For instance, in May 2022, Equinix acquired four data centers from Empresa Nacional De Telecomunicaciones S.A. ("Entel") in Chile. Equinix also signed an agreement to acquire another data center from Entel, with all five data centers holding an enterprise value of USD 735 million. Equinix operates eleven International Business Exchange (IBX) data centers in Brazil, Mexico, and Colombia.
- The increasing internet consumption in the Latin American region through e-commerce, m-commerce, digitalization, and on-demand video subscription platforms are driving the need for data centers. Internet providers and online-platform owners need data centers for providing services online. Hence, increased usage also demands more data centers.
- The plans for establishing data centers have and will continue to create the demand for powering the facilities. The companies focus on green and renewable energy sources, like solar and wind energy, to meet wide-scale sustainability goals. The asset management services help such data centers thrive over the area, ensuring uninterrupted operation through regular maintenance. The powering facilities also demand facility management companies to provide a reliable and continuous power supply.
- For instance, in April 2022, HostDime announced the construction of a solar power plant to power its data centers in João Pessoa, Brazil, with an investment of USD 1.2 million to meet the power demand of 1.2 MW. The plant will also meet the power requirements of the 30% expansion in the data center scheduled for 2022, saving around USD 35,000/month in the first year of operation. Such progressive projects in the Latin American region are best managed by the asset management facilities with their experienced operations and certified protocols.
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Development in Brazil to Drive the Market Significantly
- Brazil is becoming a hub for development in technology and other demographical changes. The region is attracting international investors to leverage the developing technological ecosystem. Various new facilities as a plan for global expansion by globally-operational companies are entering Brazil to utilize the economic benefits offered by the local government and overall portfolio for investments. The increase in data infrastructure, indicated by the internet penetration and other factors to welcome future technologies like 5G, will encourage the market.
- The region's expansion of data center facilities creates demand for facility management services. Government investments are also supporting the movement. For instance, in April 2022, the government of Rio Grande-do-Sul in Brazil announced the investment of USD 18 million through Procergs, a state-owned data processing company, in constructing a new disaster recovery data center. The funds will be partly utilized for upgrading Procergs' infrastructure, information security, and telecommunications. Such developments reflect the promising prospects of advancements in the region.
- According to the World Bank, in 2020, the population of Brazil aged 65 years and above accounted for around 10% of the total population. The figure has increased from about 6.8% around a decade ago. In the coming years, the population aged above 65 will increase, needing better healthcare infrastructure. Hence, Brazil will witness an increase in healthcare facilities, leveraging its technological and economic advancements, creating demand for facilities management in the healthcare industry.
- The Brazilian government is facilitating the influx of foreign investors by easing the employment regulations and offering tax benefits to encourage economic and strategic investments. Regulations like Lei Geral de Protecao de Dados (LGPD) direct data usage, acquisition, and management, are shaping the company's governance norms. Such conditions are encouraging local players like Velvet to emerge too. For instance, in February 2022, Velvet, a Brazilian start-up, announced to have raised funds of around USD 200 million. Such developments encourage corporate and industrial establishments in Brazil, paving the way for facilities management services.
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The Latin America facility management market is highly consolidated, with limited players comprising most of the market. The companies are investing in various real estate projects from multinational companies that expand in Latin American countries, including Brazil and Colombia. Companies aim for certification from regulatory departments to recognize the quality of facility management services offered. The increase in demand for facility management services due to data centers and other major projects is driving the industry's growth in the region.
- September 2021 - Sodexo On-site secured certification for Distinction of Hospital Hygiene Services. The company, the IQG Hospital Hygiene seal in association with two client hospitals: Unimed Litoral, in Santa Catarina, and Unimed Ribeirão Preto, in the interior of São Paulo, approved by the Brazilian Society of Hospital Hospitality (SBHH). According to the Health CEO of Sodexo On-site, the certification highlights the great commitment, care, and attention to detail, assuring the best experience for the doctors and patients. Such certificates help in building reliability and credibility as a facility management provider for a sensitive area like healthcare.
- May 2022 - Ecolab launched a No-Rinse Alkaline Floor cleaner to clean areas with fat residues, including cafeterias and restaurants. The product can remove dirt without requiring rinsing, offers extraordinary cleaning results, and is biodegradable. The product is compatible with various floors, including the ones with wax, saving water. The quick-drying feature of the cleaner also helps avoid slippery surfaces, saving 25% on labor costs in an implementation monitored in a cafeteria measuring 900 square meters. This would help in providing better cleaning services and saving on resources.
- February 2022 - Sodexo On-site achieved the Facilities Management System Certification (NBR ISO 41001:2020) with the process conducted by Bureau Veritas in the Administration and Provision of Hygiene Services. The certification makes Sodexo On-site, Brazil, one of the first companies in Brazil and Latin America to achieve this certification for its facility management services sector, highlighting its four strengths: team governance, integrated management system structure, relationship management, and extension of customer communication tools. Such certifications help the company extend quality-assured services to its clients, providing an advantage over the competition.
Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness-Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Impact of COVID-19 on the Facility Management Industry
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increasing Investments in Healthcare Infrastructure and the Construction of Healthcare Facilities
5.1.2 Requirement of Building Information Modeling (BIM) in Commercial Buildings Addresses the Growth
5.2 Market Restraints
5.2.1 Increased instances of Data Breaches and Security Threats
6. MARKET SEGMENTATION
6.1 Segmentation - By Type
6.1.1 Inhouse Facility Management
6.1.2 Outsourced Facility Mangement
126.96.36.199 Single FM
188.8.131.52 Bundled FM
184.108.40.206 Integrated FM
6.2 Segmentation - By Offerings
6.2.1 Hard FM
6.2.2 Soft FM
6.3 Segmentation - By End User
6.4 Segmentation - By Geography
6.4.4 Rest of the Latin America
7. COMPETITIVE LANDSCAPE
*List Not Exhaustive
7.1 Company Profiles
7.1.1 CBRE Group, Inc.
7.1.2 Cushman & Wakefield plc
7.1.3 Sodexo, Inc.
7.1.4 Ecolab Inc.
7.1.5 Aramark Corporation
7.1.6 Jones Lang LaSalle IP, Inc.
7.1.7 ISS A/S
7.1.8 Tecma Group of Companies
7.1.9 G4S Brazil (Allied Universal Company)
8. INVESTMENT ANALYSIS
9. FUTURE TRENDS
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Frequently Asked Questions
What is the study period of this market?
The Latin America Facility Management Market market is studied from 2020 - 2027.
What is the growth rate of Latin America Facility Management Market?
The Latin America Facility Management Market is growing at a CAGR of 7.78% over the next 5 years.
Who are the key players in Latin America Facility Management Market?
Aramark, Ecolab Inc., Sodexo, Inc., Cushman & Wakefield plc, CBRE Group, Inc. are the major companies operating in Latin America Facility Management Market.