Business Daily from THE HINDU group of publications
Monday, Dec 25, 2006
ePaper
Business Daily from THE HINDU group of publications Monday, Dec 25, 2006 ePaper |
|
|
|
|
|
|
|
|
|
|
Home Page
-
Real Estate & Construction Variety - Interiors & Homes Facility management sees rapid growth Deepak Goel
Snapshot Companies are increasingly looking at outsourcing non-core activities in order to cut costs and liabilities. Some companies are planning to include computer-networking management in the office in their basket of services. Only 10 per cent of the market is organised but this share is expected to grow.
New Delhi , Dec. 24 A fallout of the real estate boom is the facility management (upkeep and maintenance of buildings) sector experiencing rapid growth. Companies engaged in the business are seeing their revenues double every year for the last few years. The scope of facility management extends from residential complexes to corporate houses, from leisure centres to even institutions such as hospitals. Several public sector companies too have followed the trend. The gamut of services that can be outsourced include pest control, concierge management, pantry management, transport, water and plumbing, apart from cleaning and security. The reason for the sector taking off is companies increasingly looking at outsourcing non-core activities in order to cut costs and liabilities. ``Corporates have become more professional and want to quit non-core activities. Hence, they have begun to outsource them," said Ms Charu Thapar, Executive Director, Cushman and Wakefield India Pvt Ltd, which is into facility management. Real estate developer Vipul Group too is bullish about the business with an exclusive entity for the facility management activities, Vipul Facility Management Pvt Ltd (VFMPL). "The market for such services is expanding to public sector undertakings as well, who have started outsourcing activities like cleaning, security and power management," said Mr R. Krishnan, Chief Executive Officer, VFMPL. Ms Thapar explained how the segment was responding to the needs of corporate houses. "Some companies like to keep a mixed model where in they keep some of the services to themselves and outsource others," said Ms Thapar. The basket of services can even extend to providing computer networking management in the office. "We are planning to get into a joint venture with an IT player next year to provide the service," said Mr Krishnan.
Captive opportunity
While several real estate developers are themselves providing such services, it is only seen as a captive opportunity by some of them. "We manage our own properties as opposed to outsourcing as it ensures maintenance of the same standards of quality with which we build our products. It acts as a goodwill ambassador. It does result in some revenue generation but we don't focus on revenue through this activity," said Chief Financial Officer of Bangalore-based Sobha Developers, Mr Pradumna Kanodia. Even with many developers and consultancies engaged in the activity, it is estimated that about 10 per cent of the market is organised. But this share may grow as companies chart out major expansion plans. VFMPL and Cushman and Wakefield plan to double their business in the next 1-2 years. VFMPL is also planning to tap the overseas facility management market, starting with the West Asian and South East Asian countries.
More Stories on : Real Estate & Construction | Interiors & Homes
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
