Thailand Facilities Management Market

Facilities management, without a doubt, plays a part in future economic growth. Based on how they moderate their facilities, companies can be more proactive about how they operate their businesses and control their workforces. If more tools are used to measure the workplace, the demand for data interpreters is increasing. Facilities management is becoming an increasingly important part of any sector, and the role of facilities management is in high demand.

Definition / Scope
Market Overview
Market Risks
Top Market Opportunities
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Other Key Market Trends
Impact of COVID-19
Market Size and Forecast
Market Outlook
Technology Roadmap
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References

Definition / Scope

Facility management is described by the International Facility Management Association (IFMA) as the activity of coordinating a physical workspace with an organization’s people and work, which includes activities such as equipment maintenance, room planning, and portfolio forecasting. Emergency preparedness & business continuity, environmental protection, human factors, communication, project management, efficiency, real estate & property management, leadership & strategy, and others are all part of facility management. The study, on the other hand, focuses primarily on the technology side of facility management, which involves software and services used to boost efficiency, and effectiveness of facility management services.

The demand for facility management solutions and services has increased in recent years and is expected to continue to rise dramatically over the next few years. The increase in demand is due to increased government spending in industries such as transportation, electricity, and construction, among others. Furthermore, facilities management service providers work with building management to provide their services. The staff, facilities, and other assets are all included in the contract.

Market Overview

The facility management market was worth USD 5.69 billion in 2020, and it is projected to grow to USD 12.68 billion by 2027, with a CAGR of 12% over the forecast period (2021 – 2027). 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.

One of the main drivers of the FM market’s growth can be attributed to increased 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.

Companies that use the single service model attempt to hire and manage a variety of professional FM service providers to collaborate with them. The corporation outsources to known suppliers and controls procurement, contracts, and day-to-day relationship management directly under this “best of breed” manner.

Companies seek to rationalize their suppliers by bundling together three or four identical services to be handled by a single contractor in the bundled scenario. Several types of services may be bundled (usually divided into hard and soft FM services) and handled by multiple vendors.

The Bundled Services Outsourcing hold the dominant position in the Facilities Management Market in Thailand as users prefer bundled services over single service outsourcing for avoiding the hassle of multi-party management.

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 Facility Management Market in Thailand 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 the Facility Management Market in Thailand 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 Thailand Facilities Management Market include

Strong Outsourcing Trend is advancing growth in Thailand Facilities Management Market

There are many factors that have contributed to the market’s expansion. The powerful outsourcing trend, in which more businesses engage FM service providers to handle non-core business lines, is the key factor driving up demand for FM in Thailand. High-tech buildings, which require specialized solutions to preserve operational and energy efficiency, saw a rise in Facilities Management demand in 2020.

Growth in the Infrastructure Sector is Boosting the Facility Management Services Market

Thailand’s government is concentrating its efforts on infrastructure growth. The government has 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 Thai government is 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 Thailand 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 is furthering the growth of FM Market in Thailand

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 Driving Facility 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 Thailand 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” fication

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.

Other Key Market Trends

Some of the other significant trends witnessed in the Facilities Management Market in Thailand include

Increased levels of FM outsourcing and the implementation of an IFM approach indicate that buyers are becoming more mature and able to collaborate with suppliers.
Suppliers are also enhancing their supply capability by using performance-based metrics to evaluate and track their performance.
Global multinationals’ increasing expansion in APAC has necessitated the outsourcing of FM services.
Via mergers and acquisitions, multinational suppliers such as Sodexo and ISS have expanded their presence in these regions since 2010. (M&A)

Impact of COVID-19

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 Facilities Management (FM) Market in Thailand is valued at US$ 5.69 Billion in 2020 and is poised to grow at a CAGR of 12% to reach a valuation of US$ 12.58 Billion in 2027.

Market Size based on Building Type

The Commercial segment dominated the Facilities Management Market in Thailand and accounted for 40% of the market share generating revenues to the tune of US$ 2.21 Billion in 2020 and is projected to grow at a CAGR of 11% to reach a Market Value of US$ 4.59 Billion in 2027.

The Industrial segment is the fastest growing segment which constituted for 27% of the Market Share producing revenues of US$ 1.54 Billion in 2020 and is poised to grow at a CAGR of 13.4% to reach a Market Size of US$ 3.71 Billion in 2027.

The Institutional segment contributed to 23% of the Market Share and is expected to grow at a CAGR of 12.2% to reach a Valuation of US$ 2.93 Billion in 2027 Market Size of US$ 1.31 Billion in 2020.

The Public / Infrastructure segment constituted 5.3% of the Market Share and has garnered revenues to the range of US$ 301 Million in 2020 and is projected to reach a Market Valuation of US$ 649 Million in 2027 growing at 11.6%

The Other segments accounted for 4.7% of the Market Share and is expected to reach a Market Size of US$ 548.2 Million in 2027 from a valuation of US$ 267.4 Million in 2020 growing at 10.8%

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 – 2027)

The Housekeeping segment is the fastest growing segment which constituted for 24% of the Market Share producing revenues of US$ 884 Million in 2020 and is poised to grow at a CAGR of 11.4% to reach a Market Size of US$ 1.88 Billion in 2027.

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$ 1.66 Billion in 2020 and is projected to grow at a CAGR of 10.8% to reach a Market Value of US$ 3.4 Billion in 2027.

The Electrical segment contributed to 19% of the Market Share and is expected to grow at a CAGR of 11.8% to reach a Valuation of US$ 1.53 Billion in 2027 Market Size of US$ 702 Million in 2020.

The Cleaning segment constituted 6% of the Market Share and has garnered revenues to the range of US$ 221.9 Million in 2020 and is projected to reach a Market Valuation of US$ 506 Million in 2027 growing at 12.5%

The Mechanical, and Civil Engineering services segments accounted for 4% of the Market Share and is expected to reach a Market Size of US$ 319 Million in 2027 from a valuation of US$ 148 Million in 2020 growing at 11.6%

Waste Management segment is the fastest growing segment among the segments in the Hard Services section registering a CAGR of 13.2% and holding a Market Share of 46% recording revenues of US$ 916 Million in 2020 and is expected to reach a Valuation of US$ 2.18 Billion in 2027

Energy Management segment constitutes 26% of the Market Share and generated revenues to the tune of US$ 517.4 Million in 2020 and is poised to grow at a CAGR of 11.3% to reach a Market Size of US$ 1.094 Billion in 2027

Wastewater Management holds a Market Share of 17% and recorded revenues of US$ 338.3 Million in 2020 and is projected to grow at a CAGR of 11.5% to reach a value of US$ 724.8 Million in 2027

Other Green Energy Management secured a Market share of 11% and it generated revenues to the tune of US$ 218.9 Million in 2020 and is expected to grow at a CAGR of 12% over the forecast period (2020 – 2027) to reach a Market Value of US$ 483.9 Million in 2027.

Market Outlook

COVID-19 is expected to have an effect on ventures and enterprises, with the value chain slowing down and hampering the delivery of FM services to new buildings.

However, after COVID-19, FM services such as sanitation will become even more essential as the market recovers to pre-pandemic levels by 2023 and continues to expand steadily thereafter. With a compound annual growth rate (CAGR) of 12%, the market is expected to hit $12.68 billion in 2027, up from $5.69 billion in 2020. A rise in urbanization, a boom in digital technology adoption, increasing knowledge of FM services, and a shift in work culture and work patterns are all significant enablers of the FM sector.

The general lack of understanding about the importance and efficacy of outsourced FM services has hampered healthy growth; however, with increased demand for cleaning and environmental services following COVID-19, this is likely to change. As a result, it is important for FM companies to develop these services in order to satisfy consumer demand.

The Thailand FM market has a lot of potential post-pandemic because the country is expected to stabilize faster than any other in the world. Indonesia is expected to remain the largest of the individual country’s FM markets, but Thailand is expected to be the fastest growing.

Performance-based contracts that guarantee service and performance to FM clients would also see significant business model innovation. Companies should also invest in cutting-edge technology like artificial intelligence and cloud computing to improve process efficiency and ensure that end customers receive high-quality service.

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

Owing to the presence of a small number of players concentrated in Thailand, the facility management industry is approaching a consolidated level. To improve their presence in this market, these major players have used a variety of growth strategies, including mergers and acquisitions, new product releases, expansions, joint ventures, alliances, 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.

Mergers and Acquisitions

Sodexo (Thailand) Co. Ltd. and Amata Facility Service Co. Ltd.
ATALIAN Global Services Thailand Co. Ltd. and Phuket Guard Services Co. Ltd.
PCS Security and Facility Services Ltd. and Comin Thai Engineering Solutions Co. Ltd.
Angel Real Estate Consultancy and Ariva Hospitality Thailand Limited
ATALIAN Global Services Thailand Co. Ltd. and PSS Cleaning and Service Co. Ltd.
ATALIAN Global Services Thailand Co. Ltd. and PS Guard Holding

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 2019. 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 Players in the Facilities Management Market in Thailand include

PCS Security and Facility Services Ltd

Property Care Services (Thailand) Ltd. also known as “PCS” was established in 1967.The specialties of the company include Total Facilities Management, Security Personnel & Systems, Cleaning Services, Mechanical & Electrical Services, Washroom Hygiene Services, Pest Management, Catering Services, Gardening Services, and Inventory & Audit Services.

ISS Facility Services Co. Ltd

Iss A/S is a facility services company headquartered in Denmark. It provides public and private sector customers with single service, multi-service, and integrated facility service (IFS). It provides a variety of services, including cleaning, which includes regular, periodic, industry, and special cleaning; security, which includes physical security, consulting, workplace emergency management, surveillance, and technical installations; and catering, which includes cafe services, events catering, vending services, and contract catering.

G4S Security Services (Thailand) Limited

G4S Plc is a security firm headquartered in the United Kingdom. The company focuses on providing consumers with security services and solutions. Secure Solutions and Cash Solutions are two of its services. Secure Solutions is a company that specialises in protection and security technologies. Secure Solutions provides software tools such as RISK360, which includes evidence-based risk assessment, crisis management, and travel advisory systems. Security systems such as Symmetry Link access control systems and visitor management systems are also available from Secure Solutions. Retail Technology Solutions are part of the Cash Solutions category. Cash technology services focusing on cash processing make up Retail Technology Solutions.

Sodexo (Thailand) Co. Ltd.

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 sterilisation, 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.

CB Richard Ellis (Thailand) Co. Ltd.

Cb Richard Ellis (Thailand) Company Limited was founded in 1988. The company’s 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.

Strategic Conclusion

This report only touched on a couple of the main drivers of FM today; there are several more. What is clear is that technological advances and changing workplace expectations are transforming corporate real estate, as well as the traditional image of the real estate professional.

Gone are the days when real estate was regarded as an afterthought and its practitioners as merely engineers. The next generation of real estate professionals will be more akin to business managers and executives who incorporate empathy, strategic thinking, commercial experience, and an eye for creativity and quality improvement. This more accurately reflects the function’s role as a catalyst for change and agility as well as a key performance driver.

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