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Czech Republic Facility Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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    Report

  • 100 Pages
  • June 2022
  • Region: Czech Republic
  • Mordor Intelligence
  • ID: 5617291
The Czech Republic Facility Management Market is expected to grow at a CAGR of 2.46% over the forecast period 2022 to 2027. The Czech Republic is supposed to be one of the biggest outsourced markets for facility management services in terms of maturity and sophistication.

Key Highlights

  • As per the BTI index, in the 2022 forecast, the country ranked 41st in the World Bank’s Doing Business Report (compared to 27th in 2017 and 35th in 2019). The situation varies by field of business - obtaining a construction permit is most difficult, requiring 21 procedures and 246 days. The new Building Act Adopted in June 2021 should improve the situation, which will drive the market conditions in favor of the future acquisition and startup in the FM industry.
  • The Czech Republic is one of the most open economies globally and a sought-after destination for foreign investors. One crucial factor in planning and assessing FDI is possible security impact. The Act on the Examination of Foreign Investments, intended to help the state better protect key Czech companies from unwanted takeovers by risky foreign investors, was prepared over a long period time and adopted by the lower chamber in January 2021, which will favour the local Fm industry players to come forward and with extra funding from foreign investors will bolster the entire FM industry in the market.
  • Digitalization is the crucial factor in driving market growth in the future, with companies and businesses innovating new ways to create eco-friendly structures with all the applications and facilities like HVAC, automated car parking, and cleaning. These requirements will require technological innovation while planning the building structure.
  • The FM Industry in Czech Republic has been experiencing a shift toward adopting new technologies. With this comes challenges like successfully integrating technology with humans in an effective and cost-efficient way and interpreting data in meaningful structures which could be easily interpreted by people working in the industry. Along with the pressure of following the new regulatory framework adapted recently by the goverment for Building construction in the region, also the ongoing Ukraine Russia war has impacted the supply chain of the FM industry.
  • The outbreak of COVID-19 has had a mixed business impact on facilities management firms. The restrictions on the movement of people resulted in a decline in project work and a decreased level of activity across many customer sites. Significant players in the market, such as Diversey holding Ltd, CBRE Group, Optimal facilities management and others, were adversely affected due to the pandemic lockdown.The acceptance and availability of new technologies - raises the expectation that significant disruptions will bring significant productivity improvements to industries such as Facility management.

Key Market Trends


Industrial Segment Accounted to Hold the Major Share in the Market

  • The industrial sector of the Czech region has been going through high development owing to the adaptation of the Liner Act that the government adopted in 2019. This will speed up the property settlement in infrastructural projects and speed up the construction in the region. The adoption of the Liner act will bolster the ongoing industrial and infrastructure project and help facility management companies take advantage of these ongoing projects by providing critical services like water management, electricity, technical, cleaning, and logistics.
  • As per the CBRE report on the Czech Republic market Figures Q1, 2022. the total space under construction is approximately 1,147,000 sq m, an increase of 3% compared to the previous quarter and 106% as compared to last year's same quarter. Around 23% of this space is located in the Olomouc region where these ongoing construction sites require lots of maintenance and FM services to build a structure which is environmentally friendly to attain sustainability.
  • In Prague region total leasing activity TLA in Q1 2022 exceeded 135,630. The market was dominated by renegotiations in existing premises which accounted for 43 % of total TLA. These leasing activities are mainly for infrastructural development in the region which will require facilities companies to cater basic requirement of ongoing projects which include electricity, IoT, cleaning services.
  • As per the data published in Market outlook 2022 Czech Republic by CBRE the most active companies in all these development are IT ccompanies (27%), manufacturing companies 13% , consulting/ proffesional services accounted for 10% which include service from FM companies.
  • The ongoing projects require a lot of investment from various sectors, government or private. Still, the common thing between all these investments is the aim for development in the region which is mainly for the future perspective so that country could narrow the GDP stood at negative 5.3% owing to covid 19 impact on the projects and businesses.


Logistics Accounts to Hold the Key to Market Growth

  • The Czech Republic Region has been focusing on developing its infrastructure with the help of private as well as public funding which in turn increases the demand of services like logistics for the fulfillment of raw product supply at the project location which will attract many players around the world to fulfill the requirement on ongoing projects.
  • For instance, the total take-up of industrial space in Q1 2022 stands at 404,200 sq meter, an increase of 35 % from the previous year. 43 % of the volume came from logistics companies followed by manufacturing companies 36 %, and distribution companies accounting for 19 % remaining, and 2 % from other sectors (source: CBRE).
  • In terms of Volume take-up, Q1 2022 was the third-highest ever recorded in the Czech Republic. Industrial market exceeded by 2 previous quarters of Q3 and Q4 of 2021. This is mostly driven by logistics companies.
  • Recently in the region, one of the largest transactions in the Industrial sector was reported to be global real state firm Hines, which has acquired portfolio of four logistics assets totalling 65,960 sq meter located in Brandys nad labem, Vestec, and Jazlovice. With this transaction its quite evident that with ongoing projetcs in the region the buisnessess will require logistic compnaies for their facilities and supply requirement .
  • The Czech Republic market has been experiencing higher demand for leasing spaces dominated by renegotiations in existing premises, which accounted for 43% of total leasing activities. This negotiation involves companies from every sector out of the total 10 % companies reported being from consulting and professional services (source: CBRE).


Competitive Landscape


The Czech Republic Facility Management Market is highly competitive with the presence of diverse firms of different sizes. This market is anticipated to encounter a number of partnerships, mergers, and acquisitions as organizations continue to invest strategically in offsetting the present slowdowns that they are experiencing. The clients in this region are employing FM services to increase the ease of their business operations. The market comprises key solutions and service providers, such as CBRE Group, Dalkia (EDF Group), Skanska a.s., OPTIMAL Engineering spol. s r.o, Diversey Holdings, Ltd and Johnson Controls.
  • March 2022 - Hines, the global real estate firm from CPI Property Group, has acquired a portfolio of four logistics assets, spanning 65,960 square meters, in Prague on behalf of its Hines European Core Fund (HECF). The fully-let assets are located in Brandýs nad Labem, Vestec, and Jažlovice, all highly desirable, well connected, and established last-mile logistics locations in the Czech capital. Direct highway access provides a gateway to most of the Prague market within 30 to 40 minutes of drive time. The core occupiers are Continental Automotive, Boels, and Mapei.
  • March 2022 - Kinstellar has advised 365. to invest on its acquisition of three shopping center projects from the CPI Property Group. Rybar, Soppe & Partners reportedly advised the seller. According to the firm, the acquired portfolio includes the IGY Ceske Budejovice, OC Gecko, and City Park Jihlava shopping centers located in the Czech Republic.

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Table of Contents

1 INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porters Five Force Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Assessment of Impact of COVID-19 on the Market
5 MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Industrial Growth Addresses the Market Growth
5.1.2 Increasing Logistics Holds the Major Growth
5.2 Market Restraints
5.2.1 Geopolitical Situation and Ongoing Changes in Macro-environment
6 MARKET SEGMENTATION
6.1 By Facility Management Type
6.1.1 In-House Facility Management
6.1.2 Outsourced Facility Management
6.1.2.1 Single FM
6.1.2.2 Bundled FM
6.1.2.3 Integrated FM
6.2 By Offerings
6.2.1 Hard FM
6.2.2 Soft FM
6.3 By End-User
6.3.1 Commercial
6.3.2 Institutional
6.3.3 Public/Infrastructure
6.3.4 Industrial
6.3.5 Other End-Users
7 COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Diversey Holdings, Ltd
7.1.2 CBRE Group, Inc
7.1.3 OPTIMAL Engineering spol. s r.o
7.1.4 Dalkia (EDF Group)
7.1.5 Mott Macdonald
7.1.6 Johnson Controls
7.1.7 Skanska a.s
7.1.8 JLL Group
7.1.9 Sodexo
8 INVESTMENT ANALYSIS9 FUTURE OF THE MARKET

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Diversey Holdings, Ltd
  • CBRE Group, Inc
  • OPTIMAL Engineering spol. s r.o
  • Dalkia (EDF Group)
  • Mott Macdonald
  • Johnson Controls
  • Skanska a.s
  • JLL Group
  • Sodexo

Methodology

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