Author: Mintel Group Ltd.
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Facilities Management - UK - October 2018

OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
The market
Bordering on economy independent
Strongly established but still large potential
Figure 1: Development of the potential market for facilities management services, by type of contract, 2013-17
Many different services
Figure 2: Segmentation of the total facilities management and contracted out services, by sector of service, 2013-17
Customer expectations
Growth prospects
Figure 3: Forecast segmentation of the potential market for facilities management, 2018-22
Technology – from reducing manpower to adding value
Companies and brands
Some disruption
Legislative pressures on margins
M&A activity changing
Figure 4: Facilities management M&A activity, by sector, 2014-17
Specialisation very different to other corporates
What we think
ISSUES AND INSIGHTS
The impact of Brexit
The facts
The implications
Figure 5: Quarterly effective exchange rate index for Sterling
Figure 6: Hourly minimum wage in the EU, by country, 2017
Figure 7: Levels of expectation in the facilities management environment, 2017
Technology the way forward
The facts
The implications
Figure 8: Expectations of workforce growth in the facilities management sector, 2017
THE MARKET – WHAT YOU NEED TO KNOW
Difficult to define boundaries
Protection from economic changes
Technology expanding opportunities
MARKET SIZE
A mix of services
Figure 9: Potential market for facilities management services, 2013-17
Figure 10: Actual outsourced services typically defined as facilities management, 2013-17
Figure 11: Actual market for integrated facilities management, 2013-17
MARKET SEGMENTATION
Integrated facilities management market penetration
Figure 12: Segmentation of the potential market for facilities management services, by type of contract, 2013-17
Figure 13: Comparative growth of integrated facilities management, contracted-out and internal services, 2013-17
Individual markets
Figure 14: Segmentation of the total facilities management and contracted-out services, by sector of service, 2013-17
MARKET FORECAST
Economic uncertainty – an opportunity or threat?
Figure 15: Forecast market for integrated facilities management services, 2018-22
Figure 16: Forecast segmentation of the potential market for facilities management, 2018-22
Figure 17: Forecast segmentation of the market for contracted-out services, 2018-22
THE IMPACT OF THE ECONOMY
GDP
Figure 18: GDP Overall quarterly development, Q4 2016-Q2
Figure 19: GDP quarterly development, by sector, 2004-18
Figure 20: Forecast GDP development, 2017-22
MARKET TRENDS
A developed industry but expanding
Legislative pressures on margins
Living wage
Figure 21: National living wage rates, 2016-18
The Apprenticeship Levy
Figure 22: Expected impact of the Apprenticeship Levy on introducing new talent to the facilities management sector, 2017
Workplace pensions
Figure 23: Composition and progression of workplace pension contributions, 2012-19 (% of earnings)
Customer expectations
Public sector
Building information modelling and other technologies
MARKET DRIVERS
New construction
Figure 24: Construction output in Great Britain, 2013-17
New housebuilding
Figure 25: New housebuilding construction activity 2013-17 actual and 2018-22 forecast
New public non-residential
Figure 26: Public non-residential new construction activity 2013-17 actual and 2018-22 forecast
Figure 27: Segmentation of new public non-residential construction, 2013-17 (£ million)
New private industrial
Figure 28: Private industrial new construction activity 2013-17 actual and 2018-22 forecast
Figure 29: Segmentation of new private industrial construction, 2013-17 (£ million)
New private commercial
Figure 30: Private commercial new construction activity 2013-17 actual and 2018-22 forecast
Figure 31: Segmentation of new private commercial construction, 2013-17 (£ million)
New infrastructure
Figure 32: Infrastructure new construction activity 2013-17 actual and 2018-22 forecast
Figure 33: New infrastructure output, 2013-17
Repair & maintenance
Figure 34: Housing repair and maintenance expenditure by sector 2013-17 actual and 2018-22 forecast
Figure 35: Infrastructure repair and maintenance expenditure by sector 2013-17 actual and 2018-22 forecast
Figure 36: Private industrial and commercial repair and maintenance expenditure by sector 2013-17 actual and 2018-22 forecast
Figure 37: Public non-residential repair and maintenance expenditure by sector 2013-17 actual and 2018-22 forecast
Mechanical and electrical contracting
Figure 38: The market for M&E contracting, 2013-17
Distribution of workplaces
Figure 39: Number of PAYE/VAT-registered business establishments, by industry, 2013-17 (000s)
Public Private Partnerships
Figure 40: Capital costs of current PPP projects, 2017
Figure 41: Unitary payments on current PPPs, 1997-2050
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Industry disruption
M&A activity changing
Figure 42: Facilities management M&A activity, by sector, 2014-17
International appetite for UK remains
INDUSTRY STRUCTURE
The specialisation difference to other corporate sectors
Figure 43: Analysis of changes in the structure of the combined facilities support activities industry, 2013-17
Figure 44: Size of facilities management sites, 2017
Figure 45: Turnover analysis of facilities management companies, 2017
M&A driven by the variety of services
Highly competitive sector leading to leveraging data
COMPETITIVE STRATEGIES
Technological developments
Mitie targets Connected Workspace
G4S identifies £2.45 billion of technology related revenues
Market- or service-specific, versus complete coverage
Market focus
Serco targets public sector
Figure 46: Analysis of Serco Group turnover, by sector, 2017
Single service focus
Compass prioritises food
G4S prioritises security
COMPANY PROFILES
National operators
Figure 47: Breakdown of Mitie revenues, 2017 (£ million)
Single service concentrations
Single market concentrations
International consolidators
Construction heritage
Property agents
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Methodology
FURTHER SOURCES AND CONTACTS
Trade associations
British Institute of Facilities Management (BIFM)
The Facilities Management Association
Trade magazines
Building and Facilities Management
Building Services and Environmental Engineer
Facilities Management Journal
FM World
Practical Facilities Management
Premises & Facilities Management

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