Southeast Asian Integrated Facilities Management Growth Opportunities

The integrated facilities management (IFM) market in Southeast Asia (SEA) is in its early stages of development, owing to reduced expectations gaps between IFM providers and end users, increased need for energy efficiency, and regulatory assistance. The rise of service providers that provide specialised FM services is also driving growth. The Shift towards Green Buildings and Robotic Technologies offer lucrative Opportunities for the Market Players.

Definition / Scope
Market Overview
Top Market Opportunities
Market Risks
Market Drivers
Market Restraints
Industry Challenges
Post COVID Recovery
Market Size and Forecast
Market Outlook
Technology Roadmap
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

Integrated facilities management (IFM) does exactly what it says on the tin: it consolidates all of your facility management contracts into a single solution.

IFM can integrate hard facilities management, which includes building fabric aspects, with soft facilities management, such as security, cleaning, and waste management.

Examples of integrated facilities management

Hard Facilities Management
Building Fabric and Maintenance
Fire Safety
HVAC Systems
Lighting
Plumbing
Roofing
Soft Facilities Management
Catering
Cleaning
Mail Sorting
Security
Waste Management
Window Cleaning

Benefits of integrated facilities management

IFM (integrated facilities management) is a best-of-both-worlds solution for maintenance, repair, and other services that you don’t want to undertake in-house.

Outsourcing facilities management to a single source has various advantages:
Expert assistance with services the customer doesn’t wants to deal with on your own.
When compared to coordinating various service providers, there is less administration.

Market Overview

The Integrated Facilities Management (IFM) market was worth USD 1.82 billion in 2020, and it is projected to grow to USD 2.41 billion by 2025, with a CAGR of 5.8% over the forecast period (2021 – 2025).

Facility management (FM) encompasses management processes and strategies for building management, facilities management, and general harmonization of the work environment within an enterprise. For an enterprise, this framework standardizes programmes and streamlines processes.

spending on infrastructure. Furthermore, the growing focus on process optimization and energy efficiency improvements are the primary driving forces behind the growth of the facility management industry.

The integrated facility management industry is being driven by the rising real estate sector, which is being fueled by the construction of both residential and commercial structures such as business centres, offices, manufacturing units, and housing apartments, among other structures.

The market is divided into three categories based on services: hard services, soft services, and others. Because of the global expansion of the infrastructure industry, the hard services category is likely to increase at a faster rate. Cleaning, plumbing and drainage, building fabric maintenance, and other hard services are included in the section. These services are related to the physical part of the building.

The Facilities Management Market in Thailand is seeing an increase in demand for security, housekeeping, electrical, cleaning, mechanical, and civil engineering services from the real estate sector. The expanding building of malls and retail outlets is also propelling the sector forward.

Furthermore, the hard services sub-segment is being driven by the rapid rise of the building & construction industry as a result of increased urbanization around the world. Soft services, the fastest-growing sub-segment within the service type category, is predicted to develop significantly during the projected period. Increased investments in waste management, energy management, wastewater management, and other green energy management industries have contributed to this rise.

Real estate, manufacturing, retail, and the public sector are just a few of the industry verticals that have seen significant infrastructure growth. Because of the increasing need to integrate data from operating facilities into other business applications, these verticals are the primary end users of facility management solutions.

However, one of the factors limiting market growth is security issues about the safety of devices and networks. Growing security breaches and cybercrime community threats are causing skepticism, which is impacting business development.

Market Risks

The Major Risk Factors to be considered before venturing into the Integrated Facilities Management Market in SEA include:

IT Security Risk

From a facility standpoint, the first, but not always most apparent, source of risk is IT/security-related. Most facility managers are now aware of the advantages of implementing FM software or a framework (e.g., CAFM, CMMS, IWMS). Manually managing an FM programme of any size or complexity, or using a spreadsheet-based technique, is not only impractical, but also likely to fail in the short term.

Using an FM technology platform to add complexity to facility operations will result in newfound awareness, cost savings, and service improvements. However, depending on the system’s security strategy and underlying technology implementation, these gains can be accompanied by unanticipated corporate-level (“front page”) risk factors.

Contractor Management Risk

FM groups are responsible for hiring a range of commercial contractors to address their ongoing repair and maintenance issues. Maintaining all of this knowledge on all of a company’s contractors all of the time is both expensive and challenging. When you first hired a service provider, their insurance may have been up to date, To make sure it stays up to date. A Pandora’s Box of potential risk issues relating to uninsured or uncredentialed contractors accessing a company’s locations may emerge if not handled properly.

After an event, companies often discover that their contractors were on site without valid insurance or current certification. Unqualified or underperforming contractors, or contractors sourced locally without adhering to corporate standards, are also a concern. Firms that depend on also run into operational or performance risk without an objective method to compare contractors against key performance indicators.

Top Market Opportunities

The Major Opportunities for the new-entrants in the Integrated Facilities Management Market in SEA include

Green buildings

It’s quick to point to the financial advantages of green design in the drive toward more environmentally friendly buildings and facilities. Green programmes such as LED lighting, water and energy recycling, and energy-efficient windows have been shown to yield a nearly 20% return on investment over time. When it comes to designing a new building or enhancing facility operations, these tangible design features make it clear that facility management practitioners should invest in green solutions.

Robotic Technologies

Automated Guided Vehicles (AGVs) offer potential opportunities to transport food, linen, and hospital supplies in a secure, sanitary, and effective manner in unique environments such as hospitals.

Skilled cleaning robots have significant demand and offers plethora of opportunities, according to the International Federation of Robotics (IFR). In 2020, the total number of technical service robots sold worldwide increased by 25% to 21.6 million, up from 32,939 in 2014. Robotics for advanced cleaning units saw a more than twofold increase in revenue in 2020.

The applications of using robots extend beyond cost savings. When buildings and grounds are vacant, tasks can be completed “out of hours.” It’s also possible to save money on lighting, heating, and cooling because robots can hold their own lights and sensors when they need to see.

Market Drivers

The Major Drivers of the SEA Integrated Facilities Management Market include

Increasing demand for cloud-based facility management solutions

Cloud-based solutions provide a safe and secure way to host facilities management software. They also assist firms in lowering operating costs by enhancing security and communication across teams and subsidiaries spread across numerous locations. Secure hosting of sensitive data, better security and scalability, and quick disaster recovery are all advantages of cloud-based facilities management solutions. The backups are saved on a public or private cloud hosting platform, allowing businesses to quickly retrieve vital server data.

Secure logins allow data to be accessed from anywhere with a stable internet connection. Customer satisfaction is improved, and repair and maintenance expenses are reduced, thanks to cloud-based facilities management solutions. These advantages have led to a rise in the adoption of cloud-based solutions for integrating facility management services, which is expected to fuel market expansion.

Growth in the Infrastructure Sector

The governments in SEA are concentrating its efforts on infrastructure growth. The governments have begun to invest heavily in railways, ports, airports, and a variety of other industries. To keep the infrastructure clean and green, there have been several partnerships with various private contractors, including these types of management service providers.

Furthermore, the SEA governments are in the process of signing contracts with a number of foreign players to complete and link their infrastructure both internally and across borders. Thailand, for example, intends to invest 1.09 trillion-baht ($33.39 billion) in public-private partnership (PPP) projects between 2020 and 2027. The number of investment projects increased from 1,523 in 2019 to 1,717 projects in 2020.

Therefore, the growth of the infrastructure sector in SEA is driving this market, simultaneously. Moreover, the service providers across the country have ample growth opportunities for seeking contracts from private sectors.

Shifting office environments

Because of the downfall of the conventional office layout, room planning and workplace logistics have become increasingly important. Managing open offices, activity-based workspaces, hot desks, hotel desks, and the diverse array of spaces found in today’s workplace necessitates careful attention. Furthermore, workplace administrators who can anticipate and monitor these various spaces can help the organization optimize the value of its lease by maximizing space use and optimization.

Other aspects of facilities management include Space-as-a-Service, the gig economy, and sustainable business practices. The workplace plays a huge role in business success. This realization has forced businesses to rethink how they use and manage their equipment.

Need for Efficient Energy Management

Energy efficiency was found to be a proven and worthwhile investment approach by facility management. Facility managers have reduced energy usage and expenditures by implementing technology such as energy-efficient lighting and HVAC equipment. These tactics have been shown to significantly save operating costs while also increasing productivity in these facilities.

The data that enables facility energy management to act appropriately with energy savings strategies is a big component to success. The building, electricity, and cooling equipment are tracked by the data centre infrastructure management (DCIM) system, which is controlled by the IT department, according to GreenBiz. This system can help respond to fluctuations in energy use to help optimize energy efficiency.

Market Restraints

Despite the rapidly growing demand for better facilities management, pitfalls still exist. Facility management market analysis shows several headwinds within the industry

Maintenance of Aging Equipment & Facilities

With each passing year, the machinery and building systems begin to show signs of wear and tear, as well as some technical issues. Since it is unavoidable to replace it at some stage, taking good maintenance and preventive steps can be extremely beneficial. Planning is important for extending the life of current assets while keeping up with upcoming expenses. However, it is important for a facilities manager to avoid, correct, and upgrade equipment when taking into account all related expenses, so that a portion of the budget is set aside for emergency repairs and replacements.

Integration of facility management with legacy ERP systems

In larger companies, legacy enterprise resource planning (ERP) software also reigns supreme. Regrettably, legacy ERP platforms do not take the workplace into account as a value source. Most enterprise software systems have a walled-garden nature, making switching to an Integrated Workplace Management System (IWMS) or Computer-Aided Facilities Management (CAFM) software difficult—and integration is difficult.

Industry Challenges

The Major Challenges affecting the growth of the Facility Management Market in Thailand include

Lack of skills and expertise

Even seasoned facilities managers facility managers are catching up to the technological advancements in facility management. The majority of workplace management and space planning platforms are relatively new, and those with extensive experience extracting data from them are few and far between. Furthermore, there is a lag in philosophic shifts—facilities management is no longer reactive. Taking a value-add approach to the workplace is still gaining momentum. Qualified professionals will quickly enter the field, but educating and training them will take years.

Lack of managerial awareness

The C-suite isn’t fully aware of the advantages of facilities management. The issue stems from a lack of awareness of and adoption of prerequisite technologies. Many companies are yet to embrace an IoT ecosystem and are still transitioning to cloud computing systems. Additionally, their transition from traditional office layouts is still in its early stages. When these variables come together, a better understanding of the role of facilities management is likely to emerge.

Technology Trends

The Digital Technologies disrupting the growth of the Facility Management Market in SEA include

The Continued Growth of Internet of Things (IOT) And Smart Devices in Facilities

Facility optimization has progressed well beyond merely reducing energy consumption as a means of increasing profits. Innovative tech and software systems have transformed it, focusing on improved asset efficiency, connected buildings, and preventive maintenance management.

Building datasets that have never existed before are being created by internet-connected devices and can now be analyzed using machine learning. Machine learning can be used by building owners, administrators, and engineers to sift through data and uncover insights into industry dynamics, building efficiency optimization, and other big-data applications.

Furthermore, since these systems gather data on a continuous basis, you’ll be able to optimise your physical assets based on real-time information. This enables the facilities management team to evaluate consumption trends, allowing you to devise strategies for reducing costs and the performance across your entire asset portfolio.

In 2021, the Facility Management industry is expected to spend substantially less time manually gathering data and more time using IoT, Building Automation, and Machine Learning to achieve optimization goals.

“APP” ification

People trust digital platforms like smartphones more because of their speed, convenience, and reliability, and in some cases, apps are the preferred method of conducting transactions. Adoption of the ‘App’ has opened a two-way gateway, allowing everything from people’s music tastes to their personal finances, as well as their internet searches and social media “likes,” to be identified, and for those preferences to be “served” by appropriate, personalized content.

As a result, research indicates that consumers want to browse and shop anytime, anywhere, and that they are increasingly expecting a highly personalized experience, with reviews, product selection, product features, and even delivery options tailored to their preferences.

Understanding customers and reacting to patterns and evolving expectations has never been more analytically accurate. As a result, brands are investing in the ability to understand it, promote goods based on that knowledge, and even provide the customized products that consumers have come to expect.

Post COVID-19 Recovery

Because of the COVID-19 outbreak, demand for facility management solutions and facilities is dwindling. Since business activities in these sectors have decreased, there has been a significant drop in the demand and supply of raw materials in various sectors, including transportation, manufacturing, and real estate. As a result, there is less need for facility management solutions in these industries.

Employees are unable to work despite the availability of raw materials due to pandemic fears. However, as businesses gradually resume operations following the lockdown, the demand for facility management solutions and services is growing due to the need for workplace management.

Market Size and Forecast

The Integrated Facilities market in SEA is estimated to garner $2.41 billion in revenue by 2025 from $1.82 billion in 2020, registering a 5.8% compound annual growth rate (CAGR). Furthermore, the increased deployment of technology as a result of COVID-19, as well as environmentally concerned customers’ emphasis on adopting energy-efficient ways, will accelerate market growth.

Though IFM adoption levels are projected to differ throughout Southeast Asian countries, the highest adoption rates are forecast in Singapore and Malaysia.

Market Size based on Service Type

Based on the Service Type, the Facilities Management Market is segmented into Hard and Soft Services

The Soft Services are further segmented into Security, Housekeeping, Electrical, Cleaning, Mechanical and Civil Engineering Services

The Hard Services are classified into waste management, energy management, wastewater management, and other green energy management

The Soft Services dominated the Facilities Management Market in Thailand and it accounts for 65% of the Market Share and the Hard Services accounts for 35% of the Market Share in 2020 and the dominance of the soft services is expected to continue over the forecast period (2020 – 2025)

The Housekeeping segment is the fastest growing segment which constituted for 24% of the Market Share producing revenues of US$ 437 Million in 2020 and is poised to grow at a CAGR of 6.4% to reach a Market Size of US$ 596 Million in 2025.

The Security segment dominated the Facilities Management Market in Thailand and accounted for 45% of the market share generating revenues to the tune of US$ 819 Million in 2020 and is projected to grow at a CAGR of 4.8% to reach a Market Value of US$ 1.04 Billion in 2025.

The Electrical segment contributed to 19% of the Market Share and is expected to grow at a CAGR of 5.8% to reach a Valuation of US$ 461.3 Million in 2025 Market Size of US$ 348 Million in 2020.

The Cleaning segment constituted 6% of the Market Share and has garnered revenues to the range of US$ 109 Million in 2020 and is projected to reach a Market Valuation of US$ 142.5 Million in 2025 growing at 5.5%

The Mechanical, and Civil Engineering services segments accounted for 4% of the Market Share and is expected to reach a Market Size of US$ 95.6 Million in 2025 from a valuation of US$ 72.8 Million in 2020 growing at 5.6%

Waste Management segment is the fastest growing segment among the segments in the Hard Services section registering a CAGR of 6.2% and holding a Market Share of 46% recording revenues of US$ 837.2 Million in 2020 and is expected to reach a Valuation of US$ 1.13 Billion in 2025

Energy Management segment constitutes 26% of the Market Share and generated revenues to the tune of US$ 473.2 Million in 2020 and is poised to grow at a CAGR of 5.3% to reach a Market Size of US$ 612.2 Million in 2025

Wastewater Management holds a Market Share of 17% and recorded revenues of US$ 309.4 Million in 2020 and is projected to grow at a CAGR of 5.5% to reach a value of US$ 404.4 Million in 2025

Other Green Energy Management secured a Market share of 11% and it generated revenues to the tune of US$ 200.2 Million in 2020 and is expected to grow at a CAGR of 6% over the forecast period (2020 – 2025) to reach a Market Value of US$ 267.9 Million in 2025.

Market Size based on Country

Some countries (Singapore, Malaysia) have a high rate of IFM adoption, whereas others have a slower rate (the Philippines and Vietnam). However, relative to nearby regions such as Australia and New Zealand, or Japan and South Korea, regional adoption is lower.

Country	Market Size in 2020 (US$ Mn)	Market Size in 2025 (US$ Mn)	CAGR (%) 2020 – 2025
Malaysia	455	608.9	6
Singapore	364	498.7	6.5
Indonesia	273	361.9	5.8
Philippines	182	237.9	5..5
Thailand	145.6	184	4.8
Vietnam	122	151.3	4.4

Market Outlook

According to a recent study conducted by Reogma Market Insights on Southeast Asian Integrated Facilities Management (IFM), the IFM market is growing in the region as a result of increased demand for energy efficiency, regulatory support, narrowing expectation gaps between service providers and end-users, and the emergence of specialized FM service providers.

As a result, the market is predicted to earn $2.41 billion in sales by 2025, an increase of 5.8% over the $1.82 billion recorded in 2020. Furthermore, the increased deployment of technology as a result of COVID-19, as well as environmentally concerned customers requesting the use of energy-efficient ways, would speed up market progress, according to the report.

It also stated that the highest adoption rates in the region are projected to be seen in Singapore and Malaysia, with IMF adoption rates varying between SE Asian countries.

“Changes in attitude across all stakeholders, including service providers, clients, and occupiers, are having a substantial impact on facilities management (FM), whether in terms of a value offer or service requirements, Innovation through the use of technology-enabled proposals or enabling technologies is critical for the future of FM.”

IFM opportunities can cover a wide range of building-related topics, from energy to visitor experience. As a result, service providers must recognize the need to move quickly by forming partnerships or collaborations with appropriate technology or platform providers or organizations with strong technical or specialised competencies.

Technology Roadmap

Some of the technology enablers for the growth of the Facilities Management Market in Thailand include

Offering performance-based service contracts, which may be a solution for cost-sensitive customers during difficult times

Investing in online human resourcing platforms to help reduce human resource liability and negotiate wage payments

Partnering with automation manufacturers and application developers to leverage their solutions to strengthen existing FM services

Adopting and integrating digital technologies with FM services, thus improving the service providers’ internal processes

Competitive Landscape

Due to the presence of a few numbers of competitors concentrated in a few countries, the Integrated facilities management market in SEA is approaching a consolidated stage. To enhance their position in this market, these key competitors have used a variety of growth methods, including mergers and acquisitions, new product releases, expansions, joint ventures, partnerships, and others.

Key Market Developments

In May 2020: Accruent introduced enhancements in its cloud-based manufacturing solutions. The major Accruent cloud-based manufacturing solution include synchronization of asset data between EAM and EDM solutions, API-based integration options for Meridian EDM software, and Single sign-on (SSO) for Accruent manufacturing solutions.

In April 2019: IBM collaborated with Sund & Bælt, a company that owns and operates some of the largest infrastructure in the world, to assist in IBM’s development of an AI-powered IoT solution designed to help prolong the lifespan of aging bridges, tunnels, highways, and railways.

Competitive Factors

In terms of sales, service providers including Sodexo, CBRE Group, Inc., ISS A/S, and Johnson Controls International plc. hold the most market share in 2020. To strengthen their presence in developing countries, such large corporations are focusing on securing new contracts. In addition, these facility management firms are embracing modern and creative technology in order to deliver more and more comprehensive services to their customers.

Being a Fragmented Market, to Outshine Competitors in the Facilities Management Market in Thailand the Market Players are focusing on value creation by offering best possible services with cost benefits for the user of FM services, the success rate of facility management has been mainly reliant on costs and how to obtain more for less through cost-cutting. Despite the fact that cost-cutting will continue to dominate the agenda, with a particular focus on lowering occupancy costs, being a strategic partner will also include discovering innovative methods to add value for workspace occupants and other stakeholders. This can be demonstrated through the adoption of innovative and forward-thinking technologies that allow for greater mobility or better circumstances for employee training, as well as the establishment of a healthier workplace environment that can boost employee productivity, reduce absenteeism, and reduce overall stress levels.

Key Market Players

Some of the Key Market Players in the Southeast Asian Integrated Facilities Management Market include

AWC Berhad (AWC) is an investment holding company established in Malaysia. In three departments, the company provides entire building solutions: Facilities Division, Environment Division, and Engineering Division. Investment holding, facilities, engineering, and the environment are the company’s four segments. The Investment Holding sector provides corporate services at the group level. Maintenance services for office, commercial, industrial, residential, and administrative buildings are provided by the Facilities segment.

CB Richard Ellis line of business includes renting, buying, selling and appraising real estate. CBRE Group, Inc. is a holding company with branches that handle all of the company’s activities. The business of the company is commercial real estate services and investment. Commercial real estate services are provided under the CBRE brand, investment management services are provided under the CBRE Global Investors brand, and construction services are provided under the Trammell Crow Company brand. Commercial land, corporate services, project and transaction management, tenant/occupier and property/agency leasing, capital markets solutions (property sales, commercial mortgage brokerage, loan origination and servicing), and real estate investment management are the company’s main areas of emphasis.

Colliers International Group Inc. is a company that specializes in commercial real estate. In the United States, Canada, Australia, the United Kingdom, Germany, France, and a number of other Asian, European, and Latin American nations, the Company provides a variety of commercial real estate services. Americas, EMEA, Asia Pacific, and Investment Management are the company’s segments. Colliers Real Estate Services and Investment Management Services are two of the company’s services. Sales and lease brokerage, as well as outsourcing and advisory services, are all part of Colliers Real Estate Services.

Cushman & Wakefield plc is a provider of commercial real estate services. Property, facilities, and project management, leasing, capital markets and valuation, and other services are among the company’s business lines. Americas, Europe, the Middle East, and Africa (EMEA), and Asia Pacific (APAC) are the company’s three segments. APAC includes operations in Australia, Singapore, China and other markets in the Asia Pacific region.

Sodexo SA is a France based service provider. On-site Services, Benefits & Rewards Services, and Personal & Home Services are the company’s three primary divisions. On-site Services provides onsite customizable services to the Business & Administrations, Healthcare & Seniors, and Education sectors, including foodservices, office design, medical device sterilization, reception, and cleaning. Business customers can use Benefits & Rewards Programs to increase loyalty, appreciation, work-life balance, travel and expense control, and health and wellness. Personal and Home Services were divided into three categories: childcare programmes are designed to look after your children.

UEM Edgenta Berhad, formerly Faber Group Berhad, is a Malaysian firm that manages its subsidiaries’ investments and provides management services. The asset development and asset management consultancy segment is involved in road infrastructure, civil and building related works; the integrated facilities management segment is involved in hospital support services, facilities management, and infrastructure facility services; the infrastructure maintenance segment is involved in the maintenance and repair of civil, mechanical, and electrical works on roads; and the infrastructure maintenance segment is involved in the maintenance and repair of civil, mechanical, and electrical works on roads.

Strategic Conclusion

Until recently, most SEA companies believed that a single service provider could deliver a comprehensive range of FM services, therefore they associated with numerous distinct providers, each of whom was responsible for a certain stage and service offering.

While many forward-thinking companies are now combining services under one provider, there is a significant difference between just bundling all services under one supplier and genuine integration with a single outsourced partner.

With SEA poised for continued steady economic growth, the development of new infrastructure, and a renewed push to attract foreign direct investment, multinationals and rapidly growing local companies should take advantage of IFM services, to optimize real estate performance and allow them to focus on their core business and strategy.

References

Appendix

CAGR – Compounded Annual Growth Rate
US$ – US Dollars
CAFM – Computer Aided Facility Management
CMMS – Computerized Maintenance Management System
IWMS – Integrated Workplace Management System
LED – Light Emitting Diode
AGVs – Automated Guided Vehicles
IFR – International Federation of Robotics