Hardly a week goes by without news that someone from the UK facilities management industry is moving to the world’s fastest growing FM market. According to research from Middle East Strategy Advisers (Mesa), the Gulf region’s facilities management market is set to be worth £434 billion over the next 25 years.
And it’s not just the boom in construction (more than a third of the world’s cranes are in Dubai) which is fuelling the rising demand for FM. Existing facilities are ageing with many suffering from a previous culture of low maintenance. Many were poorly constructed in the first place and now need high maintenance as a result. Harsh environmental conditions (the emirate has a subtropical, arid climate with temperatures reaching 45°c) mean airconditioning units work overtime. Dubai’s skyscrapers are built on desert which means that they require high-quality Boom town Hardly a week goes by without news that someone from the UK facilities management industry is moving to the world’s fastest growing FM market services and landscaping to maintain a five-star environment. Outsourcing is also growing more acceptable in the region and an increasing recognition of the importance of sustainability mean that professional FM is in strong demand.
Dubai’s economic growth continues to be impressive, encouraged by high oil prices and regional liquidity. The list of companies with a base in Dubai reads like the great and good from the FTSE and Fortune 100 including ABN Amro, BP, Cisco Systems, Citigroup, Ernst & Young, HSBC, KPMG, Lloyds TSB, McKinsey, Microsoft, Mitsubishi, Nestle, Nokia, Oracle, PwC, Siemens and Unilever. Dubai is now home to more than 3,000 multinational and regional corporations.
As a result more than £110 billion worth of construction projects are being planned over the next five years in the United Arab Emirates, Saudi Arabia and Qatar according to Mesa and FM firms are responding to the challenge. Operon FM, Compass Group, EC Harris, Emcor, Dalkia, FSI (FM), Gleeds, Laing O’Rourke, Macro, Jones Lang LaSalle, Drake and Scull, Mitie, Johnson Controls and Serco are just some of the UK service providers which have set up in Dubai in recent years, or are in the process of doing so, attracted by the prospects in the UAE’s second largest and wealthiest emirate.
Organised chaos
There are huge opportunities for FM service providers from the UK, says Clive Norman, commercial director at MAF Dalkia. “There are endless possibilities. It’s a new, dynamic market with clients who seek, and budget for, high quality. In comparison, the UK market is saturated.”
“It’s rather like organised chaos at the moment,” says Clare Wait, senior manager FM at developer Sama Dubai who moved to the emirate a few months ago after holding senior FM roles in pharmaceutical companies in the UK. “But the growing presence of UK FM service providers is bringing professionalism and expertise to the region, it’s just a case of educating the clients.” Some clients still talk about one-year contracts, for example.
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There are no systems in place which we take for granted in the UK such as contract management, reporting and management systems, health and safety, quality assurance and environmental management, says Wait who was also one of the FM World Rising Stars of FM. The industry’s KPIs and SLAs are also adopted from UK models.
Where Dubai holds the trump card is that it is in a position to get FM involved at the start of the design process, at concept stage. Wait, for example, is involved in looking at basics such as the location, size and ease of access into plant rooms on one of her projects and has the opportunity to inform the design. “That’s what makes Dubai such an exciting place for an FM—you have the opportunity to get involved earlier and with a wider range of projects,” she enthuses. Facilities professionals are involved in managing communities not just buildings—shops, restaurants, schools, healthcare, roads, hotels and leisure facilities.
This is what encouraged former BIFM chairman Mick Dalton to move to Dubai nine months ago as senior director, asset management, for developer Emaar.
Dalton was operations director for UK law firm White and Case and then marketing director at FM service provider GSH before moving to Dubai. Now he is responsible for a 42-man FM team with more than 20,000 residential, commercial and leisure properties. Last year 5,000 new properties were handed over to his team. “The sheer scale and breadth of experience that facilities professionals can get involved in is breathtaking” says Dalton.”There is still the issue of getting FM involved earlier in the design process, and educating clients on the importance of FM, but the tide is turning.”
Bill Heath, managing director of Mace Macro, says that it’s not the case there’s a no-maintenance culture. “There’s just a desire to get things done and the sheer scale means that operational considerations are left behind. But that happens everywhere.”
Dubai is in the luxurious position of being able to plan its infrastructure to support its growth. A new airport is being built which, with six runways, will be the world’s largest. The city is also building a monorail to transport people around the city and keep them off the already over-crowded and congested roads. Technologically, Dubai is very advanced, and is well on its way to becoming a wireless city (with mobile masts disguised as palm trees).
But some areas are still lacking. For example, when it rains, it floods as there is little drainage. And the city is still suffering from a lack of maintenance. Artificial lakes, which are key features of almost all the developments, are just holes filled with water and left to stagnate causing many FM headaches.
The role of FM is also being better understood than in the past says Dalton. “There is a growing realisation that the operational cost of maintaining buildings far outweighs the initial capital development costs.” But there remains some confusion, which is not helped by local cleaning and M&E contractors starting to describe themselves as FM firms, and the authorities doing little to prevent this.
The importance of FM is a key lesson for developers to learn because unlike in the UK, where the developer hands over a development to the council to maintain the infrastructure, in Dubai the developer is responsible for maintaining the development throughout its lifecycle so creating a site which is easy to maintain is essential.
High standards
Another key difference is that standards of service are higher in the emirate. For example, most office buildings provide a staff member on each floor to make refreshments, do the photocopying and collect print-outs. The imported labour is cheap which means that where, in the UK, machines might be used in major landscaping projects, in Dubai teams of men are employed. And because of the huge amount of construction, and the associated construction dust, people are hired to hose down the palm trees and roads and even wash the floor of the car parks. Ex-pats swap stories about people being employed to brush up the thick carpet pile in executive offices. “Second rate doesn’t apply here,” emphasises Dalton.
Dubai is learning lessons from around the world—at the FM Expo exhibition and conference in June, delegates heard examples of how more lives could have been saved on 9/11 if the World Trade Center fire doors had been better positioned—advice that’s being incorporated into some of the new skyscrapers. In turn Paul Anson, director of Operon FM, believes that the other emirates are watching Dubai so they can learn from its mistakes. But Dubai is also a victim of its own success. The sheer scale of construction means that the utilities can’t keep up and there is a delay of up to six months to connect water and electricity to new builds. There is also rumoured to be a waiting list for top-end commercial space and laws were recently passed to preventing single people living in family villas because of space concerns.
Further expansion is also hindered by red tape. According to a World Bank report Doing Business 2008, the UAE is ranked 68 out of 178 for ease of doing business (the UK is sixth) and it remains a very difficult country to set up business in—ranked 158 out of 178—and for enforcing contracts (144 out of 178).
When Operon FM decided to set up a business in the emirate in early 2006, the firm initially worked with an Arab partner. After breaking away as it wasn’t commercially beneficial, Operon decided to set up as a branch office of a local company. “But this is a tricky process and full of red tape—it took 14 months to get a licence and we had to jump through so many hoops,” recalls Anson. But going it alone can be beneficial. “It can be a disadvantage teaming up with a local partner as it is a very feudal environment so if you’re teamed up with a local partner then it may narrow your potential clients as some won’t work with people they’ve had feuds with 80 years ago,” he adds.
A lack of manpower such as skilled technicians, cleaners, security guards, engineers and delivery people is also an issue, says Dalkia’s Norman. “Historically staff have come from India, Pakistan, Sri Lanka and the Philippines but those markets are growing economically in their own right which has meant a slow down in recruitment.”
Most of the expat FMs in Dubai say they would struggle to return to the UK market after working in Dubai because of their wide-ranging experience and the challenges offered. Anson believes that FMs who have worked in the emirate will be in strong demand in a few years time because of their experience. But the pavements are not lined with gold, says Stephen Barker, director of Operon FM. Wait concurs. “The Dubai lifestyle is wonderful but financially it’s not as advantageous as I thought because of the exchange rate and the cost of accommodation.”
“You are not going to double or quadruple your salary in Dubai,” agrees Norman. “It’s not Eldorado for engineers or FMs. People come over here because there’s a lot going on and their career can benefit.”
Dubai is much like a larger version of Canary Wharf ten years ago—brand new buildings and impressive facilities but not many people around (until you hit the roads). A decade on Canary Wharf rivals the City as a financial and business centre and is a retail and residential magnet. This is what Dubai could be, but on a grander, more spectacular scale and with better levels of service. And its position between Europe, Asia and the US means that it could become a strong geographical hub — a gateway between east and west.
