Market revenues for non-residential building construction are expected to touch US$77.48 billion in 2015. The country's building construction is expected to be driven by the non-residential building sector, as opposed to the residential sector.
With most buildings now being fitted with state-of-the art technology, skilled work force is needed to maintain them. This is turning more companies towards the option of outsourcing their FM to experts that can ensure they meet regulatory stipulations. Collaboration of local market participants with foreign IFM companies is going to drive the market to maturity.
New analysis from Frost & Sullivan (buildingtechnologies.frost.com), IFM Market in South Korea, finds that the market earned revenues of $13.43 billion in 2009 and estimates this to reach $18.55 billion in 2016.
"Local conglomerates, referred to as 'chaebols' mostly have their own in-house FM teams to manage properties under the group and do not rely on external FM services," explains the analyst of this research service. "Additionally, labour management relations and inflexible labour laws have been an on-going problem in South Korea."
However, increasing cooperation between these conglomerates and foreign IFM companies is expected to drive the market. With the opening up of economic policies and expansion of services, the market is expected to grow at a compound annual growth rate of 4.1 per cent from 2010 to 2016.
"The market growth rate is expected to rise steadily towards the end of 2012 due to South Korea's liberal economic policies and expansion of service sector," notes the analyst. "The increasingly stringent building regulations and rising green facility management trend is also expected to provide impetus."
Strong support from Government and regulatory bodies on sustainability, energy efficiency and green management is another driving factor. However, there will be some resistance to the market's growth from issues regarding labour-management relations and inflexible labour laws in the manufacturing industry, low diversification and high-entry barriers.
Foreign or small local companies face difficulties getting contracts from large companies that usually have an in-house FM team. Hence, IFM companies should establish a reputation for offering high-quality service, as this has become a more important purchase criterion than pricing.
The future of the IFM market will also depend on the adoption of advanced technology. Since South Koreans are generally open to technology innovation, IFM companies are expected to provide cutting-edge solutions in both commercial and industrial segments. The outsourcing rate in the retail and media communication segments is expected to increase, as these industries are large in South Korea.
If you are interested in more information on this study, please send an email to Donna Jeremiah, Corporate Communications, at djeremiah[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country.
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Miok Lee, Corporate Communications – South Korea
P: +82 2 6710 2033 / E: miok.lee[.]frost.com.