Market Trends of United Arab Emirates Facility Management Industry
This section covers the major market trends shaping the UAE Facility Management Market according to our research experts:
Commercial End-User is Expected to hold significant Market Share
The commercial and retail segment is one of the prominent segments that contributes a significant share of facility management in the United Arab Emirates, owing to the rapid infrastructure development and rising demand from hotels, retail outlets, malls, and office buildings in the country.
- However, in the United Arab Emirates, Dubai accounts for most of the development projects undertaken in the country's commercial sector. Moreover, the Dubai Expo 2020, which happened in March 2022, had USD 7.0 billion in investments from the Dubai government across a range of infrastructure and related commercial projects, which also increased the demand for facility management services in the retail sector.
- Moreover, 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. The rise in the IT sector across the United Arab Emirates is expected to allow more expansion of commercial and facility management services.
- A survey conducted by JLL of commercial real estate customers of large companies globally, including the United Arab Emirates, has found that 67% of respondents were planning to invest in workplace mobility programs, where flexible office space supplies may have a significant role. This trend may act as a disruption to the market.
Economic growth, ongoing diversification, and a growing population-especially among high-net-worth individuals (HNIs)-have led to increased retail sales in the region. UAE retail has undergone a massive transformation in recent years thanks to the combined efforts of private and government institutions.
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Dubai Accounts for Major Market Growth
- Among the country's cities, Dubai accounts for most of the development projects undertaken in the country's commercial sector. In May 2022, Dubai Land Department (DLD) witnessed a growth of 41% in commercial office sales year-over-year from May 2021, with an 87% increase in the value of properties sold, as more end users are leveraging favorable business conditions for regional and local growth. Strong growth in the commercial real estate sector is likely to have a positive effect on the demand for facility management services.
- Moreover, hosting "Dubai Expo 2020," which was conducted in 2022, required substantial investments from the Dubai government across a range of infrastructure and related commercial projects, which may further increase the demand for facility management services in the commercial sector. Furthermore, the rise of e-commerce has led to the construction of new warehouses and logistics centers, driving the demand for FM services.
- The growth of the Dubai region is mainly due to increased investments from the government and is expected to positively influence the demand for facility management in this region. Furthermore, improvement in tourism activities in this region post-pandemic is expected to contribute to the growth of the hotel industry, thereby creating ample demand for facility management services.
- Furthermore, the outsourcing trend is gaining traction in different industries across Dubai, offering growth prospects. In addition, the UAE government is encouraging green construction activity. For instance, Dubai has started implementing its Clean Energy Strategy to achieve 75% clean energy by 2050. Green targets include 50% clean energy by 2050 and the treatment of 75% of waste by 2021, as stated by the EcoMENA Organization. These initiatives are expected to increase the region's demand for facility management services.
- Facility management firms, amid COVID-19, have been preparing to embrace a more significant role by emerging as strategic partners in the safe re-opening of offices. Likewise, adopting appropriate resources, strategies, and technologies has substantially increased. The resumption of activities and occupants' confidence to operate on secured premises are some of the drivers of booming FM services in Dubai. Hence, substantial growth is expected within the market over the forecasted period with implementations such as connected building technologies.
