Kuwait's facilities management industry growing

The rapid pace of development for large-scale real estate projects in Kuwait has led to increased demand for companies that can manage these facilities. In particular, owners of high-end properties are seeking support to maintain the premium brand image of their properties. While this sector is still in the nascent stages in Kuwait, a growing number of local and regional players are tapping into the market’s potential. Many Kuwaiti real estate development companies have already launched their own facilities management affiliates, and international firms are setting their sights on the state.

BIG NAMES: One major player in the segment is the United Facilities Management Company, which is a subsidiary of United Real Estate Company, falling under the KIPCO group umbrella. Similarly, Kuwait Real Estate Company, or AQARAT, offers an array of hospitality and facility management services. Indeed, several international firms are also eyeing opportunities to expand operations to Kuwait. The UK’s Macro, a subsidiary of the international consultancy and construction firm Mace, is one such player. Similarly, the Middle East Facility Management Association (MEFMA) serves as a platform for the development of the facility management industry across the GCC and broader Middle East. According to the group, the GCC spent an estimated $21.8bn on facility management in 2012, driven by GDP growth and construction projects.

While the UAE, Saudi Arabia and Qatar have dominated sector growth in the region to date, newer markets like Kuwait are realising the potential of investing in these services. According to the National Bank of Kuwait and construction project tracking system Ventures ONSITE, construction contracts alone were worth $13.2bn in 2013, up 41% year-on-year.

Facility management has ensured the improved functionality of real estate developments and can be particularly valuable for more complex projects. Iconic developments such as the 80-storey Al Hamra Tower require skilled expertise to manage basic upkeep, ranging from plumbing to general cleaning. In addition to maintaining a luxury image, the sheer scale of these projects underscores the need for specialised support. While maintenance requirements have traditionally been met through in-house services, developers are recognising the value in hiring professional firms.

Initiatives like MEFMA point to the latent demand for facility management. Even so, convincing clients of the benefit of these services will require shifting perspectives to look beyond cost. For example, a 2013 facility management awareness conference in Kuwait, organised by MEFMA, attracted over 170 delegates. One of the key themes to emerge from the conference was the added value of investing in facilities management. Indeed, service providers can give property owners valuable information on the condition of building assets, offer potential savings on management supply chains and provide perspectives on sustainability issues.

SEEING GREEN: Sustainable development has also garnered particular attention from local firms, including Alargan International Real Estate Company, which has made green buildings a core priority. For instance, in November 2014 the firm helped to sponsor the Kuwait Green Building Forum, which was attended by government officials, property developers and planners. Khaled Al Mashaan, Alargan’s CEO and vice-chairman, told local press, “Our main office, the Alargan Business Park at the Shuwaikh Free Trade Zone, is the first of its kind in Kuwait and has been awarded LEED Platinum certification in the areas of energy and environmental design by the US Green Building Council.”

Further to this, the National Technology Enterprises Company (NTEC), which is fully owned by the Kuwait Investment Authority, is promoting the use of technology in sectors ranging from IT to health care. In collaboration with the Kuwait Foundation for the Advancement of Science and the Kuwait Institute for Scientific Research, NTEC has established the Co-Op Solar Energy project. This involves the installation of solar photovoltaic panels in the car parks of participating cooperatives to provide them with grid-assist capacity.

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The Report: Kuwait 2015

Construction & Real Estate chapter from The Report: Kuwait 2015

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