Facilities management sector set to grow despite crisis

The facilities management (FM) industry is set for growth, as 30,000 units are likely to be delivered in 2009 despite a slowdown in the realty sector, said experts. "The facilities management industry in the region has posted tremendous growth since the opening up of the freehold market. With an additional supply of more than 30,000 units expected in 2009, the sector is set for continued strong growth, despite the global economic slowdown," said Abdulrahman Kalantar, Managing Director of Nakheel Asset Management and Design. "In 2009, we will be adding three more communities to our growing portfolio in Jumeirah Village, Jumeirah Park and Al Furjan, with associated requirements for facilities management," said Kalantar. In February, the Real Estate Regulatory Agency (Rera) said 29,319 residential units were delivered in 2008, while 31,003 and 43,880 units were set to enter the market in 2009 and 2010. Nakheel Asset Management currently manages six communities serving about 300,000 residents. An Emaar spokesperson said as several projects come on line, the occupants of these developments will need the FM services. "The FM industry offers companies that are facing the challenges of the global economic crisis, the opportunity to ensure cost benefits by negotiating contracts that bring in immediate and real savings with reduced service charges. With the onset on the Dubai Strata Law, FM managers have to work closely with their community and strata management counterparts to ensure future owners associations of jointly-owned properties are provided the best services at the best prices." The spokesperson said its portfolio of facilities management services will focus on its own development projects in the short-term. "In the short-term, due to our large portfolio of completed projects and established communities, the focus of our FM team is to ensure quality services are provided to our customers at competitive rates. Our FM strategy is to evaluate and retain the best service providers who can provide timely delivery of quality services based on measurable performance management criteria and targets," said the spokesperson. "The focus of the region on sustainable development practices is an added area where the FM sector can make a difference. Appropriate energy, water and waste management will contribute to the overall cost-effectiveness of the communities. "However, what is important is the employment drive must aim to bring not only experts in the FM domain but also those with experience in environmental management, health and safety, business continuity and supply chain management," the spokesperson said. Werner Maluck, Director, Facility Management, ACI Real Estate, said with many buildings getting ready for handover and the Strata Law regulations underway, there will be increased staff-hiring within the sector and many facilities management companies will be outsourced by developers for providing management services. "We are looking to set up a full-fledged Strata Management Company once the Strata Law regulations become effective. All will depend on the strata management regulations. We know the final regulations of the strata law are ready. We have a dedicated strata management and facilities management team. However, if the new Strata Law regulation stipulate the need for independent strata managers, then we will look at setting up either a separate team or a separate company." According to Maluck, the new strata management company will be a mid-sized firm and will provide services to other developers. The developer is also in talks with a number of service providers for the purpose of setting up the new strata management company. "We are working with Conject International to develop a tailor-made software solution for providing facilities management services," said Maluck. ACI is also hiring Berkeley, a multi-property services company as a sub-contractor on a project-to-project basis to provide facilities management services. "We are sub-contracting the company on a project-by-project basis," said Malluck. According to Kalantar, managing inflation and the spiralling costs are the main challenges under the current economic conditions. "Delivering quality services to residents with increasing pressure to reduce service charges is the key challenge facing the industry," he said. Emaar said despite the challenges of the global financial crisis, the FM industry in the region is well positioned and the current climate offers the sector the opportunity for consolidation. "While the rate of expansion could be affected by the crisis, Dubai's existing and upcoming iconic and high-tech towers will need seasoned professionals to protect and enhance the value of purchasers' investments," said the spokesperson. Maluck said developers could save anything from three to 10 per cent of their investment cost by incorporating facilities management services right in the design stage of a project. "According to value engineer