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Facilities management, the next big thing
Even as it aims for nothing less than a 25 per cent share of the local market, the facilities management subsidiary of Dubai Properties, Idama, is quite taken up with tapping prospects elsewhere.
- Leena Mathew, Freelance Writer
- Published: 15:04 December 18, 2008
- Buildings under construction in Dubai: The Mideast financial hub is seeing a correction in prices and demand for property and this could cause a shift in focus to related sectors in the coming years
- Image Credit: Support
Even as it aims for nothing less than a 25 per cent share of the local market, the facilities management subsidiary of Dubai Properties, Idama, is quite taken up with tapping prospects elsewhere.
“Internationally, it is India and the Subcontinent which gives us the closest opportunity,'' informs Mohammad Binbrek, CEO of Dubai Properties Group. “Spadework with subsidiaries and joint venture partners is still on in India. By the end of this year, we intend to announce our foray into India.''
There is not much interest about expanding into the Far East or Eastern Europe. “Any market that you go into needs to have a reciprocal acceptance, and if you do not get it you go somewhere else,'' he adds.
“Asia is an area which has tremendous opportunity. But the competition in those countries is so strong and besides many of them are closed economies which makes it difficult to penetrate.'' Closer to the region, markets such as Jordan and Saudi Arabia do not figure on the radar, which is based on a realistic assumption of its chances.
“We are not looking at entering these markets since big players are already operating there,'' the official adds. Would acquisitions or alliances with other industry operators work in Dubai Properties' favour? “For any business which reaches a level in growth, diversification is essential. But Dubai Properties is not there yet in terms diversification.
“This is mainly due to the fact that this market gives us tremendous opportunity. We really have a lot in the pipeline and there is enough for us to do. There are other entities who want to go outside and their choices are definitely based on sound business decisions.''
No such concerns exist when it comes to the home turf. The facilities management industry is expected to be valued at $53 billion by 2013, and a 25 per cent share of that would sit well on Idama's future bottomline. “I believe within a time horizon the service industry within property development will play a much bigger role than construction,'' states Binbrek. “There will come a time — I believe it is 10 years, though others might give a different time table — when construction activity will subside.
“The focus will move to providing the best for the lifetime of the property. It is like giving birth to a child and making sure its needs are taken care of and that where I think our asset management company will play a critical role.
“We see this as an opportunity to go out and launch asset management services as an independent entity. Our proposition is an integrated model, not just a niche offering which is already being provided by many companies in Dubai.''
The Dubai Properties subsidiary already provides a welter of services for sister entities such as Tecom Investments, DIFC, Dubai Healthcare City and Jumeirah Beach Residence as well as for the local offices of Goldman Sachs, Dubai TV and Daman Investments. In fact, the recent creation of Dubai Asset Management, which groups together Idama and four other entities in allied services, is expected to provide fresh impetus in widening the client base.
Will Dubai Asset Management be a profit centre in itself? Binbrek says it already operates as one and the size of the contributions will only increase with time.
“But I do not think it will be the leading contributor to our profit margins. The property development aspect that we are in still has a long way to go.''
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