As such, while IFM is already widely adopted among large office sites of international corporations across Europe, it is still in an initial stage in various public sector markets. Common to all end users, the main appeal of switching to IFM lies in the promise of further cost savings. IFM providers that can leverage synergies from the integration of services to help reduce administration, create economies of scale and ultimately provide cost savings to the client's organisation, will benefit from the rising demand for single contact solutions across all the end-user verticals.
New analysis from Frost & Sullivan (buildingtechnologies.frost.com), European IFM Market: Opportunity Analysis by Vertical Customer Sector, finds that the market earned revenues of €11.6 billion in 2008 and estimates this to reach €17 billion in 2015. The end users covered in this research are the public sector, which includes healthcare, education, government and semi-public institutions, as well as the private sector that covers commercial offices, financial services and manufacturing.
"While the government is currently investing in the public sector to mitigate the impact of the economic downturn, debts are mounting and cost pressures will drive the public sector to save wherever possible by adopting outsourcing in the medium and long-term," says Frost & Sullivan Industry Analyst Michael Meyer. "The private sector is quicker to react to the economic slump than the public sector."
Real estate management and facility management have gained greater importance in the boardrooms, especially of financial companies. Cost-saving measures like further outsourcing and tendering for combined services are benefiting the IFM market and cushioning the impact of reduced costs in discretionary spending.
Although the growth of the private sector in the IFM market has been affected by smaller contracts and the economic crisis, it will continue to grow in the long term. During the economic downturn, the growth of the public sector in the IFM market was sustained due to continued spending. Medium- and long-term growth is due to a constantly increasing propensity to outsource as a solution for dealing with amassing debts in the public sector.
However, the United Kingdom's private sector in the IFM market has been maturing for some time, and the challenge for all IFM participants is to reach a balance between being competitive and achieving minimum margins. In the current economic crisis, this challenge has become significant as IFM providers are accommodating requests to reduce spending on services that are seen as discretionary, to avoid risking long-term partnerships with their clients.
The increasing demand for value-added services will continue to drive service integration, especially where synergies with other services can be demonstrated. This is particularly relevant for environmental services as end users demand that their facility managers should also function as their sustainability managers.
"The drive towards energy efficiency offers opportunities for IFM providers with capabilities in environmental services and a way to differentiate their service offer," concludes Meyer.
If you are interested in more information on this study, please send an email to Chiara Carella, Corporate Communications, at chiara.carella[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country.
European IFM Market: Opportunity Analysis by Vertical Customer Sector is part of the Building Management Technologies Growth Partnership Services programme, which also includes research in the following markets: Growth Opportunities in the European I-FM Market (2009), European Facility Management Markets: Impact on Growth of Integration and Globalization (2009), Opportunities for Smart Buildings in Europe (2009), and Integrated Facility Management (I-FM) – Customers' Opinions in the Hospital Sector in Europe (2008). All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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European IFM Market: Opportunity Analysis by Vertical Customer Sector / M4E7