Market Overview
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, vendors are increasingly focusing on using specialized services to gain a foothold in the market, which has also witnessed several changes due to the macro-economic and social changes in the region.
The IWFM survey has identified several pressing issues impacting the FM sector. With higher costs, squeezed cash flows, and a stuttering economy, FM professionals are grappling with the prospect of deteriorating market conditions. The survey reveals a shift in sentiment, with 31% adopting a pessimistic view in 2023 compared to 15% in 2022. Respondents have identified several factors contributing to this negative outlook, including supply chain disruption (89%), increases in energy prices (86%), and the state of the UK economy (84%).
Baachu’s report reveals that the UK FM market has reached an impressive size of £49 billion, based on the annual contract value taken from 11,294 contracts. This data-driven analysis showcases the maturity and sophistication of the industry, attracting service vendors who recognize the growing demand for specialized FM services.
Furthermore, Baachu’s report highlights the significant impact the FM sector has on the country’s economy. Accounting for over 8% of the GDP and employing more than 10% of the workforce, FM plays a crucial role in driving economic growth and job creation.
Key Sectors
Among the sectors engaged in procuring FM services at a broader level include:
- Commercial Segment: The segment includes office buildings, shopping centers (with restaurants, retail shops, factory outlets, and cafes), warehouses, and wholesale stores.
- Institutional: The segment covers education and healthcare institutions. Education institutes broadly include private and public buildings of universities, primary & secondary schools and Colleges. While healthcare covers aged care facilities, public & private hospitals and other small & mid-sized facilities.
- Public/Infrastructure: The segment represents government office (public) buildings at the city, state, federal, and local levels. These public establishments cover social housing, office buildings for administrative work, prisons, defense facilities, and justice departments office.
- Industrial: The industrial segment encompasses all sizes (small, medium, and large) of manufacturing businesses.
- Other Market sector: The segment is inclusive of leisure facilities, theme parks and gardens, sports complexes, cinemas, theatres, and event grounds/exhibition facilities.
Market Potential & Data Insights
- The UK FM Market sizes up to 60.9 billion USD annually as per Baachu’s contract based valuation relying on its database as on 15th Apr-23.
- The estimates are based on the data of more than 11,000 contracts that Baachu maintains as on date in both Public and Private sectors.
- The Public sector contributes 45 billion USD to the total market while Private sector holds contracts worth 15.9 billion USD
- Soft FM which includes Catering, Cleaning, Security, Waste Management, etc is among the most sought after among the services with a 35% share.
- Among the Public sector buyers Central Government authorities take the lead to outsource FM services with a 27% share closely followed by Healthcare.
- Office Category among the private sector takes the lead with a 41% share of all FM spends.
(The information is based on the 11,294 contracts available with Baachu. On the contracts wherein information on contract value or the term is not available, we have used sectoral average to assign a value and arrive at the overall figure)
Upcoming Opportunities through Contract renewals
- The FM market will offer significant opportunities for Suppliers in the next two to three years on account of contract renewals in addition to new business prospects.
- The current year 2023 in itself will see contracts worth 1.4 billion USD in annual contract value coming up for renewals from May till end of the year.
- In the coming year 2024, contracts worth 2.6 billion USD will come up for renewals followed by 1.7 billion USD in 2025 in annual contract value.
- The Public sector buyers will offer contracts worth 3.4 billion USD while private sector buyers will offer 2.2 billion worth of contracts as the running contracts expire between 2023-25.
- Among the Services Hard FM will lead the demand with 1.9 billion USD followed by Soft FM at 1.8 billion USD and Integrated FM with contracts worth 1.6 billion USD in annual contract value
Competitive landscape
The UK FM market is dominated by large FM suppliers including a number of global players providing multiple integrated services. Apart from these there are some niche players who specialize in particular services like Catering, Cleaning, Waste Management, Security, etc. The top twenty constitute around 36% of the overall market size in terms of total contract value. Some highlights of relative positioning of FM suppliers:
- Mitie Group generates 95.5% of its revenue from the United kingdom, this shows a significant presence in the country and the broader scope for facilities management.
- CBRE Group is one of the largest commercial real estate services firms in the world in terms of 2021 revenue; USD 27.74 Billion. However, the company generated around USD 3.6 Billion in 2021 from the United Kingdom (13.03%).
- ISS generates 39% of its revenue from continental Europe (DKK 27.84 Billion) and 33% of its revenue from Northern Europe (DKK 23.42 Billion). The total revenue of the company is DKK 71.36 Billion in 2021
- Sodexo provides facility management services for various businesses It includes services such as Commercial Cleaning, Horticulture Services, and Front House to help manage a facility more efficiently and effectively. In addition, cleaning, grounds maintenance, security, and trash management are all part of Sodexo’s facilities management services.
- Atalian Servest provides a comprehensive range of facilities management services, from building to cleaning and catering to security. It also provides customers looking for a single service, bundled offering, or an integrated solution.
- Emcor Group Inc. is one of the prominent providers in delivering integrated facilities management services across the Middle East, Africa, South Asia, and the United Kingdom, with a global footprint spanning over 21 key countries.
- G4S Group (or G4S PLC) is a globally integrated security company specializing in the provision of security services and solutions to customers. Services include Manned Security Services, Electronic Safety and Solutions, Cash Solutions, Facility Management Services, Event Security and VIP Escort Services, and Security Services.
- Compass Group is a food and support services company that offers a variety of innovative dining solutions. Compass Group offers various facility management services that focus on having a facilities management team and helping support the processes that include business support, guest services, and cleaning to maintain operational control and meet standards.
By leveraging the data and insights provided in Baachu’s report, you can gain a competitive advantage in this dynamic market. Understand the trends, challenges, and opportunities that shape the FM landscape in the UK. With this knowledge, you can make informed business decisions, optimize operations, and capitalize on emerging market opportunities. To have a detailed view of the UK FM Market with complete sector & services breakdown, please download our comprehensive report here
The report has been refreshed and updated as on Apr-23 with inputs based on the addition of new contracts. The Baachu Rain database has 11,294 contracts now and the contents of the report have been updated accordingly.
This report is unique for its treatment of the growth aspect being based on the real contracts and their value. The report complements similar other reports from Frost & Sullivan and others as these reports give a glimpse of future growth based on revenues while Baachu has used Contract Values as the basis.
Don’t miss out on the opportunity to access the wealth of information presented in Baachu’s report. Equip yourself with the market intelligence necessary to stay ahead of the competition. Purchase the report today and empower your organization to thrive in the UK FM sector.
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