As the FM outsourcing gains further traction in the UK and the private sector companies continue to focus on their core business metrics and outsource the rest, the FM providers will be in the thick of heightened business opportunities in the coming year 2024.
The outsourcing to FM providers has been successfully used in various sectors like retail, professional services, healthcare, maintaining office space, logistics, manufacturing, education as well as by the public sector. The areas that FM services generally cover vary widely and primarily depends on type, size and the sector in which it operates.
The year 2024 looks promising for the FM providers as we look into the business prospects basis the deals that will be available during the year.
What is the volume of deals from private sector buyers through renewals in 2024?
The Year 2024 will see the FM Market abuzz with opportunities from the private sector buyers going by the renewals for the agreements that will come to a close. A graphical depiction shows Q3 will offer the max deals in TCV while Q2 will see the largest in terms of number of contracts.
The year will see 118 existing agreements worth ~£3.7 billion coming up for renewals from the private sector. The Quarter wise spread of the impending opportunities: Q1: No of Contracts-31; TCV ~£659 Mn; Q2: No of Contracts-33; TCV ~£748 Mn; Q3: No of Contracts-31; TCV ~£1.8 Bn and Q4: No of Contracts-23; TCV ~£540 Mn
Which services will be in high demand from the expiry accruals?
Integrated services will corner the maximum share of 55% and will stand out as top choice of the buyers while looking for suppliers of FM services with 31 agreements worth ~£2Bn seeing term closure in 2024.
Hard FM will be the next in demand with contracts worth ~£1.02 Bn and a 27% share.
Among the Soft FM services, cleaning will take the lead with 16 Contracts worth ~£161 Mn followed by Security services with 15 Contracts worth ~£117 Mn.
Which Sector will hold the maximum promise for the FM Providers?
Among the Sectors, Commercial which includes office space housed in Business complexes and Retail sector driven by shopping centers leads with a 61% share translating to ~£2.2 Bn with 79 agreements coming up for fresh bidding.
The Industrial sector which primarily comprises of the manufacturing units will see 11 Contracts worth ~£351 Million coming up for renewal in the coming year.
Housing as part of Institutional sector will command 16% share comprising of 8 contracts worth ~£509 Mn.
Which Buyers & Suppliers will hold the top stakes in terms of deal volume?
Lloyds Bank will see one of the largest contracts worth ~£850 Million with Mitie as incumbent for Integrated services including Engineering, Security, Cleaning, Catering and Data Center Services come up for renewal in Q3 of 2024.
GlaxoSmithKline and Genesis Housing with contracts worth ~£150 Million for Integrated Services & ~£140 Million for Repair & Maintenance Services respectively will also look for fresh bidders in the coming year.
Among the Suppliers holding these agreements, Mitie emerges as the leader with 25 of its contracts worth ~£1.5 billion across Sectors and services coming up for renewal.
Compass and Incentive FM with 7 Contracts each worth ~£238 Million and ~£184 Million respectively are the next two suppliers that will see the max contract term expiry.
Arcus and CBRE with 4 agreements each worth ~£98 Million and ~£129 Million are the other two suppliers among the top five.
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