The facility management market in the CEE countries Poland, Hungary, Czech Republic and Slovakia) will return to growth this year (+3.8% in value) after its stagnation in 2020 (+0.1%). For the forecast period 2020 to 2024, a yearly increase of 3.6% on average is expected, as shown in a study by Interconnection Consulting.

The trend towards outsourcing of corporate real estate management activities continues. In 2013, this share was 30%, in 2024 it will be 39%. This means that the market is still far behind the mature Western European markets. Developments in the area of external facilities vary from country to country.

Poland Weathered the Crisis Well

In Poland the market for facility management actually grew by 2.0% last year. However, considering growth of 3.7% and 3.9% for 2021 and 2022, the dynamics in the coming years will be far behind the years before the pandemic. The market volume in 2020 was €12.9 billion, taking up two-thirds of the total market volume of the CEE-4 countries. The commercial sector was the largest customer segment in Poland in 2020, with a share of 29.8%, ahead of industry (27.0%) and healthcare (14.6%). The Hungarian market fell by 1.7% in 2020. The market volume was €2.9 billion in 2020 and will already exceed the pre-pandemic level in 2021. The Hungarian facility management market will grow by 5.1% per year on average until 2024. The commercial sector is the most important customer segment, with a share of one-third of the total market, followed by the industrial sector (24.7%). The pandemic hit the market in the Czech Republic and Slovakia harder than Hungary and Poland. Both countries suffered severe setbacks with declines of 4.2 and 6.7%, respectively. The reason was a drop in interest in outsourcing during the pandemic and, especially in the Czech Republic, an extremely hard lockdown. However, a rapid rebound is also expected for the Czech Republic with growth rates of 3.7% p.a. until 2024. The largest customer segment in the Czech Republic is industry with more than one-third of the market volume. The commercial sector follows with around a quarter and then the healthcare sector with 11.5%. In Slovakia, the industrial sector has a share of 40%, followed by the commercial sector.

Increased Demand for Cleaning

Overall, facility management can be divided into three core areas (infrastructure services, technical services, business services). Infrastructure is the strongest segment in the CEE-4 countries with 49.5%. This segment includes cleaning, security, catering, gardening, reception, whereby the cleaning sector grew especially in Poland in 2020 due to the increasing demand for disinfection services and the cleaning of e.g. fan systems. The technical services sector (2020: 37.3%) will grow more dynamically in the coming years. “The reason for the increase in technical services is the rising cost of energy and, as a result, a great demand for effective energy management,” says Katarina Gajdova, the author of the study.

Foreign Companies are Leaving Hungary

For many facility managers from Western Europe who pushed their expansion abroad, the CEE market, which is still not very “mature”, became a popular playground. In 2019, however, some companies decided to leave the Hungarian market for different reasons. For example, the Hungarian real estate developer Wing Zrt. acquired Strabag PFS, and in the same year, the Danish company ISS also decided to turn its back on the Hungarian market. The operational business was to be bought by the second strongest company on the Hungarian market, B + N Reference Zrt, but the transaction is still being examined by the European competition control. Major players in the CEE market are Atalian, Securitas, ENGIE, Compass Group, Sodexo, Okin Facility.

Link to the report

04/10/2021

Copyright: Interconnection, Publication free of charge for coverage regarding the study and InterConnection Consulting.