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Nigel Hall
DNV’s Group Director of FM Services, Transguard
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The effective management of the built environment is now a major concern for property developers and owners and it is to this end that all facilities management companies are working towards.
While the recent economic downturn did affect most FM companies in terms of scaled operations and employee lay-offs, the general feeling is that the FM sector will still remain strong.
According to research carried out by Middle East Strategy Advisors (MESA), the FM market will be worth at least US$ 892 billion in the Gulf region over the next 25 years. Leaving aside the discussion on the strength of the FM industry in the coming decades, the strength of the FM industry at present, seems to be largely based on the fact that existing and near-completion resorts, buildings, hotels and mixed-use developments need to be managed and maintained.
The recently-held Cityscape Dubai event did not showcase as many new projects as in recent years, but existing plans on Reem Island, Meydan, Dubai World Central etc, still impress as new openings for facilities management. Stalled projects like Ras Al Khaimah’s La Hoya Bay are being given a new lease of life after the RAK government seized control of the $800 million project.
Another significant factor that can be seen as a driver for the growth of FM in Dubai will be the implementation of the JOP (jointly operated property – strata law) law for mixed-use developments, which allows owners of freehold titles and unit owners more independence in terms of how their buildings are going to be operated and managed.
A facilities management agreement will enable the facilities manager of the mixed-used development with a hotel component, (the hotel operator or affiliate) to be able to maintain the common areas of a mixed-use development in accordance with the standard of the hotel’s common areas itself.
In short, the implementation of the strata law in Dubai attaches more importance to the proper maintenance and upkeep of facilities rather than neglecting and letting them depreciate. The importance of having a good facility management service provider look after the cleaning and maintenance of a facility has never been more evident than now, during these recession times, when it makes more sense to retain the salability and brand value of the facility.
In fact, the going seems to be good for the FM industry in the region. A recent discussion with the Transguard Group management also helped put into perspective the clear trend of the market which has slowly but surely moved away from a cost-driven market towards service delivery and expertise. This is what the Transguard group had foreseen 18 months ago when they started FM operations and ever since, the group’s aim has been to provide a strategic and consultative FM module that delivers real value.
“The market is definitely becoming more service-orientated than before. Transguard has won a few jobs only on expertise,” informs director of FM, Nigel Hall.
UAE FM market – good enough for acquisitions
With the market having emerged from its reluctance to embrace total FM solutions, the onus of providing integrated FM solutions lies on all the major players on the scene. The Transguard Group is one such FM service provider with an objective of providing total end-to-end FM solutions to major projects in the region. It was to achieve this aim that the group recently made a significant move to acquire MACAir, a leading Dubai-based mechanical, electrical and plumbing (MEP) contractor.
With the acquisition of MACAir, a project-led MEP installation company with nearly 20 years of Middle East experience, Transguard strengthens its hard service offerings and completes its long-term strategic business plan for FM in the region.
Hitherto, Transguard was outsourcing MEP services to service partners or contractors on total FM jobs while consolidating the company’s soft service offerings during the same time period. With MACAir’s MEP maintenance capability and its expertise in MEP design and installation projects on board, Transguard will be able to bid for turnkey contracts that demand total end-to-end project management.
Transguard’s decision to acquire MACAir was made on the back of a strong fiscal growth, despite the recession, which saw the company post 57 percent increase in turnover to AED 607 million which means doubling their profit to AED 75 million during the last financial year.
Commenting on the reasons for the acquisition, Hall says:”The management thought it was more prudent to grow through acquisition rather than grow organically. The business philosophies of both the companies seemed to fit in well and the obvious synergy between the two companies will bring in results faster than organic growth.”
Transguard’s capabilities now encompass initial MEP and heating, ventilating and air conditioning (HVAC) design and installation, through to the integrated technology to manage the systems, as well as administering comprehensive maintenance contracts. Transguard will be able to pass on its technology expertise in terms of building control systems to MACAir’s MEP installations. “With our expertise in control systems, we will be able to help our clients save heavily on energy consumption,” says Hall.
Hence, it is of no great surprise that industry experts predict that the demand for facilities management will eventually remain independent of construction as developers and property owners seek to protect operations and increase brand value through total end-to-end solutions.
While the regional FM industry does have new entrants on the scene who are successful in obtaining major FM contracts, the companies who are really successful are the ones who can retain them on the basis of expertise, skill and service delivery.
“Smaller companies might initially win the business but without the necessary resources and support network, they will not be able to perform for more than a year and chances are that they will not win the tender the next time,” said Hall while reiterating the market demand for quality service.
Transguard FM recently won the Global Village winter and spring seasonal contract for cleaning and security from Tatweer, the operator of Global Village.
Transguard FM was also involved in the pre-cleaning of the Dubai Metro stations prior to the opening of the Red Line on September 9, which was a “challenge in itself due to the short time frame”.
On Transguard’s list of satisfied clients is the Radisson hotel on Yas Island, Dubai International Airport Terminal 3, Atlantis the Palm, EMAAR Hospitality Group, etc. The company’s airside services division provides a range of support services to the Emirates Airline, including cleaning the new Airbus A380 fleet.
Outsourcing by hotels- a growing market
Another trend which has worked well for Transguard’s FM Services team is the increasing need for hotels to outsource housekeeping and kitchen stewarding, a move which “works out to be more cost-effective” than having an in-house team. Transguard has been supplying manpower to key hotels in the stewarding and housekeeping areas.
“Outsourcing important areas like housekeeping and stewarding requires a great deal of trust in an external company and high-quality service is the key to success. One of the important aspects is the management interaction with clients to ensure that the communication report is in place and to see that the clients’ wishes are fulfilled.
“Outsourcing of services within a hotel which is a western way of operating is becoming quite popular in the UAE,” said Hall, adding that “outsourcing has grown by 20 percent over the last 15 months and is growing into a fairly strong market.”
As hotels seek trained personnel for their housekeeping and kitchen stewarding departments to cut down cost, it is obvious that the right way to move forward is with a business model like the Transguard Group with strengths in providing total FM Services, Cash Services and Outsourced Services.
Editor Asfia Khan writes on how the recent acquisition of a renowned MEP contractor by FM service provider Transguard points to the existence of a mature, project-led UAE FM market
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