Market Trends of Japan Facility Management Industry
This section covers the major market trends shaping the Japan Facility Management Market according to our research experts:
Integrated FM to exhibit a significant growth rate
There is a paradigm shift in the market as multiple industries are transforming from utilizing a single FM outsourcing type of model to an integrated services model that can meet all customers' core needs on a large scale. In addition, with newer technology transforming the way organizations work, integrated facility management has become the key to smart buildings and work environments.
For Various Vendors, IFM has been away for streamlined and efficient work and task management. The concept has primarily resulted in fewer contracts, teams, and resources to juggle and a single integrated view of all the management-related tasks, in comparison with overseeing each independent stakeholder and every task multiple times.
IFM offers increased visibility that leads to effective management of teams, reduced operation costs, quicker responses to requests, less downtime for employees, and a greater focus on the bigger picture. Implementing large changes across multiple sites and services is also much easier using an IFM service provider.
The trends in the Japanese market are for a progression from single services to bundled services and further toward the integrated facilities management approach. This offers a broad scope of services provided and longer-term contracts, which adds value and drives better quality and economies of scale. Also, this is increasing the demand for outsourced services, where specialist expertise is required.
Moreover, various market vendors are expanding their business operations through various contracts. For instance, in April 2022, NIPPON KANZAI Co. entered into a share transfer agreement to acquire 40% of the shares of JTB Asset Management Co. Ltd.
Commercial End User Sector is expected to hold major share
The commercial segment is one of the prominent segments that contributes a good share in the facility management market in Japan. Japan's resilient GDP growth after the COVID-19 pandemic is expected to positively influence the studied market. The growth of the commercial segment is attributed to the rapid infrastructural development and rising demand for hotels, retail outlets, malls, and office buildings in the country.
The commercial sector covers office buildings occupied by business services, such as corporate offices of manufacturers, IT and telecommunication, finance and insurance, property, and other service providers. The rise in the IT sector across Japan will allow more expansion in the commercial sector along with facility management services.
For instance, the telecom players are focusing on 5G deployments in Japan, which will create significant opportunities for the region's facilities management sector. For instance, in April 2022, Softbank borrowed around USD 282 million to develop 5G base stations, aiming to further strengthen its 5G network in japan. As per Softbank, it will cover 90% of the Japanese population with a 5G network at the end of March 2022.
Moreover, Japan accounts for most of the development projects being undertaken in the country's commercial sector. Moreover, the Tokyo Olympics held in july 2021 saw a massive investment of 15.4 billion, making it the most expensive summer game ever, per a study from University of Oxford researchers.
The construction industry benefitted from the Tokyo olympics as many developments were made, including the 68,000-capacity national stadium and seven other venues for the olympic, costing USD 3 billion, and 25 other facilities were renovated. Further, the country is rapidly recovering from the construction halt of the commercial sector during the COVID-19 pandemic driving the growth of the studied market.
