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Greener retail facilities and redevelopments create opportunities for FM providers
The mature, yet highly fragmented Australian facilities management market for retail, wholesale and warehousing, is likely to find new opportunities in the trend toward more sustainable facilities and redevelopments or extensions. While new construction activity remains subdued, the opportunity to offer bundled or integrated services represents a significant untapped market.
Recent analysis from Frost & Sullivan: 'Strategic Analysis of Facilities Management in Retail, Wholesale and Warehousing - Australia', finds that market revenues are expected to grow at a compound annual growth rate of 0.8% over the period 2012 to 2019.
In 2012, 35% of FM services were outsourced and the remaining 65%, delivered in-house. Of the outsourced services, only 9% was estimated to have been delivered as an integrated facilities management solution, while 91% was delivered as 'other services' (70% provided as single FM services and 30% percent as bundled FM services).
The FM market, like many others, has benefited greatly from Australia's stable economic climate. While several economies in Europe and North America declined during the global downturn, Australia became even more prominent. Its retail market's forecast growth rate of 2.9% in 2012-2013, although modest, is still higher than Europe's or North America's.
"FM providers will be able to extract greater benefit if they are successful in altering the perception among large shopping centre owners that the operations and maintenance of the shopping centre is 'core business'," says Frost & Sullivan Industry Director, Ivan Fernandez.
As the state of the shopping centre directly translates into higher rents and profits for building owners, they look to manage FM services in-house and outsource only single FM services (cleaning, security services, repairs).
Retaining FM in-house is also a cost-cutting measure, with some shopping mall owners reducing cleaning hours by as much as 20%. Added to this, the growing popularity of online shopping is reducing floor space and the requirement for certain FM services; but on the other hand, it also increases the need for services such as storage, logistics and delivery services.
"Another new trend that is influencing the FM market is the mushrooming of green buildings," notes Ivan Fernandez. "The sustainable management of these buildings will present FM providers with opportunities to strategise and innovate their offerings."
Market participants will look to optimise energy use and make efficient use of materials, transport, cleaning, water use, heating, ventilation, air conditioning or insulation. These market trends are expected to drive demand for FM services for larger facilities through integrated service offers.
6th March 2014