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

The United Kingdom Facility Management Market is Segmented by Facility Management Type (In-house FM Service, Outsourced FM Service (Single FM, Bundled FM, Integrated FM)), Offering Type ( Hard FM, Soft FM), and End User (Commercial, Institutional, Public/ Infrastructure, Industrial, Other End Users).

Market Snapshot

UK Facility Management Market Size
Study Period: 2020-2027
Base Year: 2021
CAGR: >4.5 %

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Market Overview

The UK facility management market is expected to register a CAGR above 4.5% during the forecast period, 2022-2027. The United Kingdom is one of the largest markets for facility management services in Europe in terms of maturity and sophistication. Given the high penetration of facility management services, several service vendors operating in the country have been focused on expanding their presence to leverage the growing demand for facility management, especially with the recent trend favoring the outsourcing of non-core operations.

  • The UK facility management industry operates via integrated contracts provided by large vendors across continents and borders. The smaller local players focus on single contracts and single-service solutions. However, there are increasing opportunities to leverage facility management and corporate real estate in new ways, given the dynamics occurring across the country.
  • Over the last decade, several service vendors operating in the region have been focused on expanding their presence to leverage the increasing demand for facility management, especially with the recent trend favoring the outsourcing of non-core operations. Further, the country has been witnessing increased opportunities to leverage facility management and corporate real estate in innovative ways, given the dynamics across the country.
  • Owing to the government's constrained budget that leads to the continuous outsourcing of essential facility management services, the public sector's contribution to the facility management market in the region is significant.
  • The outbreak of COVID-19 has had a mixed business impact on facility management firms, as the restrictions on the movement of people resulted in a decline in project work and a reduced level of activity across many customer sites. The major players in the market, such as Mitie and CBRE Group, were adversely affected due to the pandemic-related lockdown.
  • FM providers have been experiencing supply chain disruptions, leading to difficulties in procuring materials and supplies. Also, they have found it harder to cope with staff shortages owing to various factors that include lockdown restrictions, self-isolation, and illness. However, the readily built environment has played an important role in supporting various industries from health and social care to transport and utilities and helped tackle the spread of the virus.
  • Since the facility management industry is heavily reliant on workers from the European Union. The soft FM services are primarily dependent on this source of labor, and restricted access post-Brexit can have significant implications. FM businesses, particularly those holding EU contracts, are expected to be affected by potential changes to migrant labor, the supply chain, and other regulations in the post-Brexit scenario.

Scope of the Report

Facility management confines multiple disciplines to ensure functionality, comfort, safety, and efficiency of any building by integrating people, place, process, and technology. While Hard services include physical, structural services like fire alarm systems lift among others, soft services include cleaning, landscaping, security, and similar human-sourced services, providing a solution to end-users such as Commercial Buildings, Retail, Government, Public Entities, etc.

The United Kingdom Facility Management Market is Segmented by In-house FM Service, Outsourced FM Service (Single FM, Bundled FM, Integrated FM), by Offering Type ( Hard FM, Soft FM) and by End-User (Commercial, Institutional, Public/ Infrastructure, Industrial).  

By Facility Management 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
Other End Users

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Key Market Trends

Single FM Service is Expected to Witness a Significant Growth

  • Working with a single facility management service provider entails primarily delegating task management to separate entities. It also entails having a different service provider for each service the organization requires, such as cleaning, reception, and vending machines. Using the services of specialized service providers has several advantages.
  • It enables the customers to concentrate on their core business, while single-service providers provide effective services to customers and help operational efficiency. Having experts handle task management will result in much higher efficiency and service quality. It will also free up company employees to focus on the most important business areas while saving resources for non-core activities.
  • The outsourced FM has been successfully used in various sectors, including the public sector, retail, professional services, healthcare, technology, logistics, manufacturing, and education. The areas that FM services look after vary widely, primarily depending on their type, the size of the company, and the sector in which it operates. Some organizations will only require a single service solution provider. This is driving the demand for single FM in the country.
  • Vendors operating in the UK market have been offering single services to the clients, regardless of the emergence of bundled and integrated services, because some organizations still require single solutions. For example, TC Facilities Management Ltd offers single services, such as cleaning and security, across multiple sectors in more than 5,500 locations nationwide.
  • According to The Q1 2022 RICS UK Facilities Management Survey, approximately 32% of the respondents believed that the single FM sector was going to witness the highest growth in the next 12 months. However, substantial respondents in the survey believed that other services such as bundled FM and in-house services are poised to see the highest growth rate in the next 12 months.
United Kingdom Facility Management Market

Commercial End User Sector is Expected to Hold a Significant Market Share

  • The commercial end-user sector cover office buildings occupied by business services, such as corporate offices of manufacturers, IT and communication, and other service providers. Owing to this, the provision of necessary fitments and interiors and commercial buildings decoration and management has gained significant importance, thereby driving the market in the country's commercial sector.
  • UK Commercial Group provides a broad range of commercial facilities management services such as commercial cleaning services, duct cleaning training, and complete facilities management across its Newcastle office. Similarly, B38 Group, a national facilities management and property support company established to meet clients' highest expectations in the commercial property sector, delivers commercial property support services, including; facilities management, property maintenance, construction, civil engineering, corporate interior fit-out, and energy services.
  • The spread of COVID-19 has forced the mass closure of workspace and the implementation of work-from-home policies in most industries, especially in the corporate buildings of the IT and telecommunication sector, which negatively affected the market. However, for some businesses, the new normal initially may mean virus-proofing their offices through short-term fixes, new working patterns, and long-term design upgrades that put hygiene at the core of workplace planning. This may positively impact soft services, such as COVID-19 cleaning services, in the region.
  • The market is witnessing multiple partnerships and mergers, and acquisition activities between the vendors and commercial entities in the United Kingdom. For instance, in Nov 2021, CBRE Group Inc. announced that it had acquired 60% of Turner & Townsend Holdings Limited, a United Kingdom-based professional service company.
  • In March 2022, 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 both the main hospital and Sid Watkins buildings. The new contract is worth EUR 3.5 million a year for three years and has the option to extend for up to two further years.
United Kingdom Facility Management Market

Competitive Landscape

The United Kingdom Facility Management is highly fragmented as it is a highly competitive market with the presence of several players of different sizes. This market is expected to experience a number of mergers, acquisitions, and partnerships as companies continue to invest in offsetting the present slowdowns that they are experiencing strategically.

  • November 2021 - ISS extended its partnership with Ecclesiastical Insurance for a further three years that will see ISS Restoration provide restoration services to Ecclesiastical Insurance Group, including churches, cathedrals, and heritage buildings, as well as the Ecclesiastical growing portfolio in the education and real estate sectors.
  • November 2021 - JLL launched a commercial partnership and strategic investment in SFR proptech leader Roofstock. The deal includes a minority investment in Roofstock by JLL and a partnership that enables JLL to expand its service offerings in the residential sector. As part of the deal, Roofstock also purchased Stessa, an asset management software-as-a-service solution for SFR investors, which had been owned by JLL Technologies (JLLT),

Recent Developments

  • July 2022 - CBRE Group has been appointed to assist the fragrance shop in its store expansion across the United Kingdom and Ireland. The retailer plans to grow its store estate by opening an additional 100 sites over the next three years. This includes a rollout of beauty stores and stores dedicated to niche fragrances.
  • March 2022 - Serco Group PLC, a provider of services to Governments, has been awarded a contract by the UK Ministry of Justice to run Majesty’s Prison and Young Offender Institute (HMP & YOI). The contract was made for a value of more than EUR 300 million for a period of 10 years.
  • November 2021 - JLL Ltd. has acquired Building Engines for a cash purchase price of approximately USD 300 million. Building Engines works in building operations platforms that transform how properties are run.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumption 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 Forces Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Buyers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitutes

      5. 4.2.5 Intensity of Competitive Rivalry

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

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Growing Trend Toward Commoditization of FM

      2. 5.1.2 Growing Demand for IFM and Outsourcing of Non-core Operations from Emerging Verticals

      3. 5.1.3 Renewed Emphasis on Workplace Optimization and Productivity

    2. 5.2 Market Challenges/Restraints

      1. 5.2.1 Market Saturation in the Public Sector

      2. 5.2.2 Growing Competition Expected to Impact Profit Margins of Existing Vendors

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Facility Management 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 Other End Users

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 CBRE Group

      2. 7.1.2 Mitie Group PLC

      3. 7.1.3 EMCOR Facilities Services WLL

      4. 7.1.4 Interserve Limited

      5. 7.1.5 G4S Facilities Management UK Limited

      6. 7.1.6 ISS UK

      7. 7.1.7 JLL Limited

      8. 7.1.8 Serco Group PLC

      9. 7.1.9 Kier Group PLC

      10. 7.1.10 Amey PLC

      11. 7.1.11 Atalian Servest

      12. 7.1.12 Sodexo Facilities Management Services

      13. 7.1.13 Compass Group

      14. 7.1.14 ENGIE FM Limited (Cofely AG)

      15. 7.1.15 VINCI Facilities Limited

      16. 7.1.16 Aramark Facilities Services

    2. *List Not Exhaustive
  8. 8. INVESTMENT ANALYSIS

  9. 9. FUTURE OF THE MARKET

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Frequently Asked Questions

The United Kingdom Facility Management Market market is studied from 2020 - 2027.

The United Kingdom Facility Management Market is growing at a CAGR of >4.5% over the next 5 years.

CBRE Group, Inc., Mitie Group PLC, Emcor Facilities Services WLL, G4S Facilities Management UK Limited, Andron Facilities Management are the major companies operating in United Kingdom Facility Management Market.

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