Introduction: Why Cost Benchmarking Matters in FM
Facilities Management (FM) is a significant cost driver for organizations across the Middle East and North Africa (MENA) region, impacting operational efficiency, asset performance, and sustainability. With rising service costs, evolving regulations, and increasing expectations from tenants and stakeholders, organizations must adopt a more strategic approach to FM expenditure.
Cost benchmarking has emerged as a critical tool to ensure FM services are delivered efficiently and cost-effectively. By comparing costs across similar assets, industries, or geographies, businesses can identify inefficiencies, negotiate better contracts, and drive operational improvements.
However, benchmarking in the MENA FM market presents unique challenges, including data limitations, varying service delivery models, and fragmented regulatory frameworks. In this blog, we explore the benefits of cost benchmarking, current challenges in the MENA region, and best-practice approaches for implementing an effective benchmarking strategy.
1. The Benefits of FM Cost Benchmarking
Effective cost benchmarking allows organizations to:
✔ Identify Cost Inefficiencies – Pinpoint areas where FM spending exceeds industry norms and optimize resource allocation.
✔ Improve Budgeting and Forecasting – Establish realistic FM budgets based on market data and trends.
✔ Enhance Contract Negotiation – Strengthen supplier and vendor discussions by leveraging comparative cost insights.
✔ Ensure Cost Transparency – Improve financial accountability and cost tracking across multiple sites.
✔ Drive Continuous Improvement – Use benchmarking insights to refine service levels and cost structures over time.
In a competitive FM landscape, organizations that leverage benchmarking gain better financial control, improved service efficiency, and long-term cost savings.
2. Cost Benchmarking Practices in the MENA Region
The FM market in MENA is characterized by a diverse mix of service models, regulatory environments, and market maturity levels. This variability makes benchmarking both challenging and essential for organizations operating in multiple locations.
A. Key Cost Benchmarking Metrics in FM
Benchmarking in FM typically involves comparing costs per square meter (sqm) for different service categories, such as:
- Hard FM Costs (Mechanical, Electrical, Plumbing (MEP) maintenance, HVAC servicing, building fabric repairs).
- Soft FM Costs (Cleaning, security, landscaping, waste management).
- Energy and Utility Costs (Electricity, water, district cooling).
- Total FM Spend relative to property type, size, and location.
B. FM Cost Structures Across MENA Markets
Benchmarking FM costs across the MENA region requires understanding market-specific factors:
- GCC (UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, Oman):
- High outsourcing penetration in FM, with performance-based contracts gaining traction.
- District cooling and energy efficiency costs significantly impact FM budgets.
- Government-led sustainability initiatives drive the need for cost-effective green FM practices.
- North Africa (Egypt, Morocco, Tunisia, Algeria):
- Lower FM outsourcing adoption, with many businesses still relying on in-house management.
- FM cost structures highly influenced by local labour markets and regulatory policies.
- Emerging demand for professional FM services in commercial real estate and mixed-use developments.
- Levant (Jordan, Lebanon):
- Economic and political challenges affect FM investment and cost predictability.
- Smaller-scale FM contracts with a focus on cost efficiency over service innovation.
- Limited access to structured FM benchmarking data, making cost optimization difficult.
C. Sources of Benchmarking Data in the MENA Region
Cost benchmarking requires access to accurate and relevant data, which can be sourced from:
✔ FM Industry Reports (Middle East FM Association (MEFMA), RICS, BICSc, IFMA).
✔ Government and Municipality FM Regulations (Dubai Municipality, Saudi Vision 2030 guidelines).
✔ FM Consultants and Auditors providing market insights.
✔ Internal Cost Data Comparisons within multi-site organizations.
However, the lack of standardized FM cost databases in MENA remains a major hurdle to effective benchmarking.
3. Challenges in FM Cost Benchmarking in the MENA Region
Despite its benefits, FM cost benchmarking faces several regional challenges:
A. Limited Market Transparency
- FM pricing structures are not always disclosed, making cost comparisons difficult.
- Variations in contract scope (e.g., full-service FM vs. specialized FM services) complicate benchmarking.
B. Variability in Service Delivery Models
- Some markets prioritize in-house FM, while others rely on fully outsourced models, making direct cost comparisons difficult.
- Different SLA structures and performance standards impact cost calculations.
C. Inconsistent Cost Allocation Practices
- Some FM budgets bundle costs (e.g., cleaning + security), while others separate services, making like-for-like benchmarking challenging.
- Depreciation and lifecycle costs are not always factored into benchmarking studies.
D. Lack of Data Standardization
- No universally accepted FM cost benchmarks exist across the region.
- Organizations often rely on internal cost tracking, limiting broader market insights.
To overcome these barriers, FM professionals must adopt structured benchmarking methodologies and leverage technology-driven insights.
4. Best Practices for FM Cost Benchmarking in MENA
A. Define Clear Benchmarking Objectives
- Identify which costs to benchmark (hard FM, soft FM, energy, total FM costs).
- Align benchmarking efforts with business goals (cost reduction, performance optimization, sustainability).
B. Use Standardized FM Cost Categories
- Implement consistent cost allocation models to compare FM expenditures accurately.
- Follow global FM standards (e.g., RICS International Property Measurement Standards).
C. Leverage CAFM/IWMS for Cost Tracking
- Use technology-driven cost analysis to improve benchmarking accuracy.
- Integrate IoT and smart FM platforms for real-time cost monitoring and predictive analytics.
D. Collaborate with FM Industry Networks
- Engage with MEFMA, RICS, IFMA to access regional benchmarking data.
- Participate in FM industry benchmarking surveys to gain market insights.
E. Benchmark Against Comparable Assets
- Ensure comparisons are made between similar asset classes (e.g., malls vs. malls, office towers vs. office towers).
- Account for geographical cost variations within the MENA region.
Conclusion: The Future of FM Cost Benchmarking in MENA
As FM matures in the MENA region, organizations must adopt data-driven benchmarking strategies to improve cost control and operational efficiency. AI-driven analytics, IoT-enabled monitoring, and industry collaboration will shape the future of FM benchmarking, helping businesses optimize costs, negotiate better contracts, and drive sustainable FM practices.
At Sustain International, we help organizations develop cost benchmarking frameworks that align with industry best practices.
📩 Want to optimize your FM costs? Contact us today to explore our benchmarking solutions.
