Real estate outsourcing market to grow to US $119.55 billion by 2026

19 April 2023

Real estate is typically the second highest expense for organisations and takes up a disproportionate volume of resources. Yet for many, property is not their core business.

Real estate has become a top priority for businesses navigating new priorities such as sustainability and employee experience.

To achieve this, companies are turning to one outsourced provider rather than multiple external experts to streamline real estate management and optimise resources – a service known as integrated facilities management (IFM).

IFM is increasingly popular, with the market expected to grow at a compound annual growth rate of 6.15% to US$119.55 billion by 2026, according to the research house Research and Markets. The market has already grown at a CAGR of 7.2% since 2021.

Outsourcing their non-core operations to a single provider is enabling organisations to focus on what they’re good at and what ultimately generates their revenue.

Nick Moore, from JLL’s Work Dynamics business said, “The key motivators of outsourcing are typically cost, sustainability, and compliance. IFM provides a single end-to-end solution with a goal to drive better outcomes for businesses through consistency, processes, and innovation. IFM is not a one-size-fits-all approach, but post-pandemic, just about all businesses are adopting new ways of operating, and many are embracing the benefits of IFM.”

Many businesses who have their own real estate departments as part of their core business operations, and who deliver services in-house or operate separate services models are turning to IFM to complement their in-house property teams. The fusing of the two to bolsters capabilities and improves operational efficiencies.

By bringing these teams together in this way, IFM provides the best outcomes for the company, allowing them to develop an effective portfolio strategy, deliver on lease obligations, move closer to their net zero objectives, and optimise data with a single integrated technology solution.

While the workplace is being redefined, it still matters more than ever. A positive employee experience can be the difference between an engaged and productive company and a company facing even more disruption.

Mr Moore said, “IFM is about understanding the functionality a business and its employees’ needs, then designing a workplace that supports that. They also benefit from the external access IFM provides through best-in-class digital strategies and solutions without the start-up investment.”

From construction to daily operations, real estate accounts for 40% of all emissions, so sustainability is a top-agenda item for businesses.

Moore also highlights the sustainability benefits of IFM, stating, “IFM can help support businesses on their sustainability journey by creating an action plan and then delivering on operational emissions reductions.”

Australia is one of the most mature outsourced markets in the Asia Pacific region, with many businesses now into their second, third or even fourth generation of outsourcing.