Outsourcing concept

The facilities management market is estimated to grow by $730.53 billion from 2023 to 2027 at a compound annual growth rate (CAGR) of 9.29 percent, according to research from Technavio. Increasing emphasis on outsourcing building management services is a key factor driving growth. Presently, major corporations, including multinational companies (MNCs), and some small to medium-sized businesses (SMBs) are showing a growing preference for outsourced services and solutions provided by third-party service providers. Outsourcing management to third parties involves assessing the optimal balance between keeping services in-house and outsourcing them, considering factors like capability, cost, and service scope. Additionally, outsourcing is shaping the landscape in various regions. The growing focus on outsourcing building management services is expected to propel market growth in the foreseeable future.

The commercial segment will account for a major share of the market's growth during the forecast period. The commercial sector plays a vital role with significant demand coming from various industries such as business services, information technology (IT), industrial and manufacturing, real estate, and healthcare. Office buildings are expected to dominate this segment due to the growing need for safe, secure, and efficient workspaces. Additionally, this sector encompasses diverse facilities such as bank branches, brokerages, check-cashing outlets, credit unions, insurance offices, and standalone automated teller machines (ATMs).

APAC is estimated to contribute 42 percent to the growth by 2027. APAC ranks among the top three contributors to the market, with expectations for the region to experience the fastest growth compared to other areas. This growth is primarily due to the rapid expansion of IT sectors like ICT and BFSI, which heavily rely on management services. Major purchasers of these services in the region include Australia, China, Hong Kong, India, and Japan. The shift towards outsourcing facility management services instead of using in-house services is a key driver of market growth. Furthermore, increased demand from the construction and real estate sectors in countries like China, India, and Australia is also contributing to market expansion in the region.

Facilities management encompasses a wide range of services and practices aimed at optimizing the functionality, safety, and efficiency of physical spaces. This includes building maintenance, energy, and asset management, and implementing sustainability solutions. Space planning and interior design enhance the utilization of space while cleaning, security, and HVAC services ensure a comfortable and secure environment. Fire safety systems and emergency response planning are crucial for safety compliance, alongside waste management and pest control. Regular facility inspections and maintenance, as well as repairs and renovations, contribute to the upkeep of the infrastructure. Technology integration, such as IoT, aids in optimizing operations, while budgeting and cost control ensure financial efficiency. Company and compliance management, disaster recovery planning, and the implementation of sustainable practices are also essential facets of effective facilities management.

Read more on facilities management and outsourcing trends here.