South Africa Facility Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The South Africa 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).

Market Snapshot

South Africa Facility Management Market Size
Study Period: 2020-2027
Base Year: 2021
CAGR: 3.4 %
South Africa Facility Management Market Major Players

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Market Overview

The South Africa facility management market is expected to grow at a CAGR of 3.4% during the forecast period, 2022-2027. South Africa's facility management industry operates with integrated contracts provided by significant global vendors and small local players focussing on single contracts and single-service solutions.

  • Increasing demand for outsourced facility management, infrastructural developments, and investments in the private sector are some of the key drivers responsible for market growth. Services in the FM industry have been commoditized to a great extent. Also, end-users are very price-sensitive, and contracts are thus aimed at shorter terms. A real estate over-supply has been creating pressure on rent yields, thus leading the customers to cut costs on FM services.
  • South Africa's population growth, economic dynamism, and rapid urbanization are also expected to generate business opportunities, provided that investments are made to enhance infrastructure and regional connectivity, in line with the Africa Union's Agenda 2063.
  • With the outbreak of Covid-19, the facility management market in South Africa is expected to witness a slight decline in growth. During the initial phase of the virus outbreak, the imposed lockdown led to a workforce shortage across the FM companies as the majority were non-local.
  • A significant trend in the adoption of Specialized area-based services has been recorded in lieu of the unprecedented demand for computing capacity following a sudden and significant shift to online working due to the COVID-19 pandemic. Various domestic vendors have observed a rise in specialized cleaning for the booming data center business.

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 its responsibility for maintaining what is often 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 the management of 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 market for integrated facility management service (IFM), along with single and bundled services, is included in the outsourced FM services segment.

South Africa 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).

By Type
Inhouse Facility Management
Outsourced Facility Management
Single FM
Bundled FM
Integrated FM
By Offering Type
Hard FM
Soft FM
By End User
Commercial
Institutional
Public/Infrastructure
Industrial
Others

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Key Market Trends

Outsourced FM is Expected to Hold a Significant Market Share

  • Soft services such as cleaning, recycling, security, pest control, handyman services, grounds maintenance, and waste disposal have emerged as mandatory activities across the commercial sectors.
  • Hard services and Specialty services have also been added to an FM company's portfolio to offer an end-to-end solution. South Africa's real estate sector and growing investments across construction activities have led the building management companies to outsource the facility management to a third-party vendor.
  • Moreover, in the sheer volume of contracts, single, bundled, and the number of integrated FM services is being demanded increasingly. The same benefits are reduced costs, time service delivery, contractual service, no equipment maintenance, etc.
  • Also, the advancement in adherence to global service delivery standards such as ISO and BICS, for instance, along with the usage of automated equipment, have been optimizing time and efforts with the delivery of superior quality.
  • The growing number of construction activities in the country is also driving the demand for outsourced FM. The country has multiple projects lined up, such as Kusile Coal-Powered Power Plant, Medupi Power Station, Waterfall City Development, and many more.
South Africa Facility Management Market Trends

Public/Infrastructure Segment is Expected to Drive the Market

  • According to the Construction Review Online, in May 2022, the government of South Africa has gazetted details of 51 top priority infrastructure projects in South Africa that have been declared strategically important and will be fast-tracked to secure the necessary approvals before August 2022. The projects are expected to start upon the issuance of the relevant tenders.
  • Some of the approved projects under waste & sanitation, energy, and transport sectors include the Vaal River System Phase 2 of the Lesotho Highlands Water Project: Gauteng, Phase 2A of the Mokolo Crocodile River (West) Augmentation Project: Limpopo, Emergency/Risk Mitigation Power Purchase Procurement Programme (after installation, these sustainable energy producers should deliver  2000MW in power), etc.
  • As of May 2021, the South African government has a portfolio of more than 93 000 buildings, and its traditional approach to property management has been to steer funds towards upgrading derelict buildings at huge capital costs, instead of directing enough funds towards the preservation of assets.
  • According to the International Monetary Fund, the GDP of South Africa took a hit in 2020 amounting to just USD 335.34 billion but quickly bounced back to USD 418.02 billion in 2021. IMF also forecasts that the GDP of the country is expected to cross USD 513.41 billion by 2027. These developments are expected to drive the demand for facility management in the country.
  • Infrastructure segment is one of the prominent segments that contributes a good share in facility management of South Africa. This segment is owing to the rapid infrastructure development and rising demand from hotels, retail outlets, malls, and office buildings in the country.
  • For instance, in August 2021, Radisson Hotel Group announced the plan to open its 16th hotel in South Africa. Radisson Hotel Middelburg is set to open at the end of 2023 in Middelburg in the Mpumalanga Province.
  • Moreover, the Boardwalk Mall is a new shopping centre being constructed within the Boardwalk precinct in Port Elizabeth, South Africa. The new shopping mall is being developed in two phases with an investment of USD 36.2 million. Construction of the Boardwalk mall commenced in May 2021. The official opening of the mall is scheduled for September 2022 which will mark the completion of the second phase. Such developments are boosting the economy of the country as well as providing new opportunities for the domestic facility management companies.
South Africa Facility Management Market Forecast

Competitive Landscape

The facility management market in South Africa is moderately fragmented due to the presence of local players and small to medium-sized firms. These major players have adopted various growth strategies, such as new product launches, expansions, joint ventures, partnerships, and others to strengthen their position in this market.

  • April 2022 - Securex South Africa 2022, Africa’s leading security and fire trade exhibition took place from 31 May to 02 June 2022 at Gallagher Convention Centre in Johannesburg, and was co-located with three additional Specialised Exhibitions trade shows, namely A-OSH Expo, Facilities Management Expo and the new Firexpo 2022. The FM vendors across the country gathered and showcased their offerings and capabilities.

Recent Developments

  • January 2022 - The BUTEC Group announced the signing of an agreement for the acquisition of all 17 companies of the ENGIE Group in Africa. All these companies are operating in the fields of facility management, energy efficiency, maintenance, ventilation, among others.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Force Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Consumers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Intensity of Competitive Rivalry

      5. 4.2.5 Threat of Substitute Products

    3. 4.3 Assessment of COVID-19 Impact on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Increasing Infrastructural Developments and Growing Retail Sector

      2. 5.1.2 Rising developments in public and private infrastructure

    2. 5.2 Market Restraints

      1. 5.2.1 Fragmented Market with Several Local Vendors

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Type

      1. 6.1.1 Inhouse Facility Management

      2. 6.1.2 Outsourced Facility Management

        1. 6.1.2.1 Single FM

        2. 6.1.2.2 Bundled FM

        3. 6.1.2.3 Integrated FM

    2. 6.2 By Offering Type

      1. 6.2.1 Hard FM

      2. 6.2.2 Soft FM

    3. 6.3 By End User

      1. 6.3.1 Commercial

      2. 6.3.2 Institutional

      3. 6.3.3 Public/Infrastructure

      4. 6.3.4 Industrial

      5. 6.3.5 Others

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles*

      1. 7.1.1 Matrix Consulting Services

      2. 7.1.2 SGS SA

      3. 7.1.3 Facilities Management Solutions (Pty) Ltd

      4. 7.1.4 Chiefton Facilities Management (Pty) Ltd

      5. 7.1.5 Tsebo Facilities Solutions

      6. 7.1.6 Excellerate Services

      7. 7.1.7 Akweni Group Property Solutions (Pty) Ltd

      8. 7.1.8 Integrico (Pty) Ltd

      9. 7.1.9 Akweni Group Property Solutions (Pty) Ltd

      10. 7.1.10 SSG Holdings

      11. 7.1.11 TROX South Africa (Pty) Ltd.

      12. 7.1.12 AFMS Group (Pty) Ltd

      13. 7.1.13 Bidvest Facilities Management

  8. 8. INVESTMENT ANALYSIS

  9. 9. FUTURE OF THE MARKET

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Frequently Asked Questions

The South Africa Facility Management Market market is studied from 2020 - 2027.

The South Africa Facility Management Market is growing at a CAGR of 3.4% over the next 5 years.

Matrix Consulting Services, SGS SA, Facilities Management Solutions (Pty) Ltd, Chiefton Facilities Management (Pty) Ltd, Tsebo Facilities Solutions are the major companies operating in South Africa Facility Management Market.

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