Facilities Management Outsourcing Market Report – UK 2020-2024

The 13th Edition of the Facilities Management Outsourcing Report – UK 2020-2024 has been published by AMA Research. Incorporating original input and primary research, the report contains analysis of the FM outsourcing market, segmentation and future trends and analysis of the industry’s leading players.

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The 13th Edition of the Facilities Management Outsourcing Report – UK 2020-2024 has been published by AMA Research. Incorporating original input and primary research, the report contains analysis of the FM outsourcing market, segmentation and future trends and analysis of the industry’s leading players.

Key content covered in the report

  • Multi-Service Provision in the UK FM Outsourcing Market – size, recent trends and key influences, forecasts and development to 2024.
  • Analysis by Key End-Use Sector – review of corporate, central/local government and health and education FM industries – market size, overall product mix within each sector, trends and influences.
  • Market Structure – review of market structure, major groups, company profiles, recent contract wins, anticipated future developments.
  • Key Market Influences – analysis of recent construction trends, government financing models and regulatory developments.

Some of the companies in this report:

Amey UK, Anabas Facilities Management, Apleona HSG Ltd, Aramark Limited, Arcadis, Arcus FM, Atalian Servest Ltd, Babcock International Group Plc, BAM Facilities Management, Bellrock Property & Facilities Management, Bouygues Energies & Services, Capita Group Plc, CBRE, Deloitte, Compass Group UK & Ireland Ltd, Elior UK PLC, Emcor UK, Engie UK, Eric Wright Group Ltd, Facility Services Group, G4S Facilities Management, Gardiner & Theobald LLP, Imtech Inviron, Incentive FM, Integral UK Ltd, Interserve Ltd, ISS Facility Services Ltd, Kier Group, Mace Macro Ltd, Mapeley Estates Ltd, Mears Group Plc, Mitie Plc, NG Bailey & Co Ltd, Norse Group, OCS Group Ltd, Petrofac FM Ltd, Pinnacle PSG, Places for People Leisure, RM Property & Facilities Solutions Ltd, Robertson Group, Rydon Maintenance, Serco Group Plc, Skanska UK Plc, Sodexo Ltd, Sodexo Ltd, Telereal Trillium, Turner Facilities Management Ltd, Vinci Construction UK Ltd, Volker Fitzpatrick, Wilson James

Areas of particular interest

  • Market development in 2015-20 – driven by the trend towards more bundled/TFM contracts, greater scrutiny of performance, emergence of more partnership and collaborative arrangements between suppliers and clients.
  • Development of more niche services including merging of FM and IT functions, greater prevalence of IT and technological solutions to improve delivery of FM services and reduce costs.
  • Influence of Covid-19 on outsourcing and FM activity, including development of more specialist cleaning services, greater penetration of home working in key sectors and changing workplace patterns.
  • Industry supply – market structure, key company profiles and contract wins.
  • Market prospects to 2024 – including a review of key market drivers and influences.

The Market

  • UK FM outsourcing market, market definition, overview of market size by value, recent and current situation 2015-2019 with estimates for 2020, recent market performance, factors underpinning demand and value growth.
  • Key market influences – including recent construction output, regulatory developments, Government financing decisions, impact of Covid-19 and impact of technological advances.
  • End-user market mix – including Corporate (e.g. commercial offices, retail, leisure/recreation, manufacturing, energy and transport/infrastructure), Central & Local Government and Health/Education.
  • Market prospects – market developments by sector, future Government spending plans, anticipated construction output and forecast trends up to 2024.

Product Mix

  • Analysis of FM market mix by service provision – cleaning, security, catering, building maintenance and energy management.
  • Analysis of FM market mix by broad end-user sector – Corporate. Central & Local Government and Healthcare/Education.
  • Corporate FM market 2015-2024 – sector performance and trends, e.g. homeworking and anticipated demand for commercial offices, growth of online shopping and betting, rationalization within the pub and restaurant sectors, etc. Analysis of sub-sectors, i.e. commercial offices, retail, leisure/entertainment, manufacturing, energy and transport infrastructure.
  • Central & Local Government FM market 2015-2024 – sector performance and trends, e.g. predicted growth of the social housing sector, winding down of PFI schemes, ongoing shrinkage of the government estate, use of Local
  • Authority Trading Companies (LATCs) to perform FM services.
  • Health & Education FM market 2015-2024 – sector performance and trends, e.g. recent construction output, more use of online methods for healthcare and education provision, anticipated demand for more care homes, budgetary pressures and spending plans.

Supply and Distribution

  • Market structure – origins of the FM industry, expansion and distribution of service provision, consolidation, recent merger and acquisition activity and impact of Carillion’s collapse.
  • Key company profiles – including turnover size, areas of specialization, recent corporate activity and major contract wins.

Although market value rose by an impressive 6% in 2016, annual growth has been far more moderate within the last few years. Much of this can be attributed to the prevailing economic climate, which has had an adverse effect upon both business and consumer confidence. Facilities outsourcing within the corporate market is considered highly mature across many sectors. As such, much of the future growth within the market is likely to come from new and emerging niche areas, whilst changes in workplace design and operation will also play a role in the market’s development.

Margins within the industry remain extremely tight, a situation which has been exacerbated by rising labour costs. Much of this has been driven by regulatory developments, such as increases in the National Living Wage. Although price remains a significant consideration for most, if not all, contracts, many clients appear to be placing greater emphasis upon other factors such as value for money, quality levels and, increasingly, outcomes.

CONTENTS

1. INTRODUCTION 6
1.1 BACKGROUND 6
1.2 SOURCES OF INFORMATION 6
2. SUMMARY & MARKET PROSPECTS 8
2.1 SUMMARY 8
2.2 MARKET PROSPECTS 9
3. FM IN THE CORPORATE SECTOR 11
3.1 FACILITIES MANAGEMENT OUTSOURCING MARKET 11
3.1.1 Definition 11
3.1.2 FM Market Size and Trends 11
3.2 CORPORATE FM MARKET DEFINITION 14
3.3 CORPORATE FM MARKET SIZE AND TRENDS 15
3.4 KEY MARKET INFLUENCES 18
3.4.1 Private Sector Construction Output 18
3.4.2 Legislation 19
3.4.3 Wages/Salaries 22
4. KEY CORPORATE END USE SECTORS 24
4.1 END USER MIX 24
4.2 COMMERCIAL OFFICES 24
4.3 RETAIL 28
4.4 LEISURE AND ENTERTAINMENT 32
4.4.1 Hotels & Guest Houses 34
4.4.2 Restaurants 35
4.4.3 Public Houses & Bars 38
4.4.4 Betting & Gaming 40
4.4.5 Other 41
4.5 OTHER END USERS 43
5. CONTRACTORS REVIEW 45
5.1 ORIGINS AND SUPPLY STRUCTURE 45
5.2 MARKET SHARES 46
5.3 COMPANY PROFILES 47
5.3.1 Leading FM Contractors 47
5.3.2 Other Large Companies in the FM Market 55
APPENDICES 62
APPENDIX A. ECONOMIC ENVIRONMENT 62
A.1 Overview and Outlook 62
A.2 GDP 63
A.3 Inflation & Interest Rates 63
A.4 Employment & Wages 64
A.5 Household Consumption 65
A.6 Sterling 66

 

TABLES AND CHARTS

CHART 1: UK FM OUTSOURCING MARKET WITHIN THE CORPORATE SECTOR AT CURRENT PRICES 2015-2024 8
CHART 2: UK BUNDLED FM OUTSOURCING MARKET AT CURRENT PRICES 2015-2024 (£ MILLION) 12
TABLE 3: UK CORPORATE FM OUTSOURCING MARKET 2015-2024 (AT CURRENT PRICES) 15
CHART 4: UK CORPORATE FM SERVICES SHARE OF OVERALL FM MARKET 2012-2021 17
TABLE 5: CONSTRUCTION NEW WORK OUTPUT AND FORECAST £BN: CORPORATE END USE MARKETS 2015-2024 CURRENT PRICES 18
TABLE 6: AVERAGE HOURLY WAGES IN SELECTED FM SECTORS BY EXPERIENCE LEVEL, 2019/2020 (£) 23
CHART 7: UK CORPORATE FM SERVICES MARKET MIX BY END USE APPLICATION BY VALUE 2019 24
CHART 8: CENTRAL LONDON OFFICE MARKET – OFFICE TAKE UP (MILLION SQ. FT) 25
CHART 9: CENTRAL LONDON OFFICE MARKET – OFFICE VACANCY RATES (%) 26
CHART 10: NUMBER OF UK RETAIL BUSINESSES WITH AN ANNUAL TURNOVER £1M+ 2015-2019 29
CHART 11: TURNOVER FOR UK RETAIL INDUSTRY (£BN) 2015-2018 30
TABLE 12: UK RETAIL VALUE SALES EXCL. AUTOMOTIVE & FUEL – NOT SEASONALLY ADJUSTED – 2014-2019 (£BN) 30
CHART 13: KEY LEISURE SECTORS – NO. OF ENTERPRISES (2015 – 2018) 33
CHART 14: TURNOVER IN THE UK HOTEL SECTOR – 2015–2024 (£BN) 34
CHART 15: TURNOVER IN THE UK RESTAURANTS SECTOR – 2012–2021 (£BN) 36
TABLE 16: TOP UK RESTAURANT OPERATORS AND THEIR BRANDS – 2019 (NO OF OUTLETS) 37
CHART 17: TURNOVER IN THE UK PUBS AND CLUBS SECTOR (£M), 2015 -2018 39
CHART 18: PERFORMANCE OF THE MANUFACTURING, UTILITIES AND TRANSPORT SECTORS – TURNOVER 2015-2019 (£ MILLION) 43
TABLE 19: TOP 20 FM SUPPORT SERVICES COMPANIES IN THE UK 47
CHART 20: GVA CHAINED VOLUME MEASURES, 2015-2019, KEY CONSTITUENT ELEMENTS 63
CHART 21: CPI INFLATION AND BANK OF ENGLAND BASE RATE, 2008-2023 64
CHART 22: AVERAGE WEEKLY EARNINGS DATA – GB – TOTAL PAY – 2014-2019 (SEASONALLY ADJUSTED) 65
CHART 23: PDI & SAVINGS RATIO AT CURRENT PRICES 2008-2023 65
CHART 24: EXCHANGE RATE FLUCTUATIONS 2015-2019, STERLING TO THE DOLLAR AND THE EURO, SPOT RATES 66


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