Facility management mkt to grow at CAGR of 20% in next 5 yrs: SILA

Facility management service provider SILA's clients in the south India include Swiggy, IFB, Decathalon, Bangalore Airport, Strides, Mahindra and Godrej. It also service third-party contracts via flex office services providers and aggregators such as Tablespace and JLL in south India. "The Indian facility management services market is expected to grow at a CAGR of 20 per cent over the next 5 years. The addressable market size of the organized facility management sector alone is constantly growing – driven by the growth in the IT, real estate, and the manufacturing and logistics sectors," says Raghav Kapur, vice-president, SILA, in an exclusive interview with Bizz Buzz

Tell us about the facility management market in south India?

The south Indian facility management market accounts for approximately 40 per cent of the organised facility management market in India. Commercial offices and IT parks in Bangalore, Chennai and Hyderabad contribute to a majority of the market share.

The size of office campuses, the availability of good talent and the relatively high quality of development projects in south India, make the region an attractive destination for MNC's to set up offices and global capability centres (GCCs) in the region.

Throw light on the SILA clientele? What is the scope and demand for facility management in south?

SILA's clients in the south include Swiggy, IFB, Decathalon, Bangalore Airport, Strides, Mahindra and Godrej. We also service third-party contracts via flex office services providers and aggregators such as Tablespace and JLL in south India. We service offices occupied by Facebook (Meta), Google, Morgan Stanley, Goldman Sachs, Microsoft, Dell. Apart from the offices, we service retail and hospitality clients within Bangalore Airport, in addition to Orion malls, Garuda malls, Nexus malls, Forum malls, Mantri malls, Phoenix Malls.

What is the future of facility management in India?

The Indian facility management services market is expected to grow at a CAGR of 20 per cent over the next 5 years. The addressable market size of the organized facility management sector alone is constantly growing – driven by the growth in the IT, real estate, and the manufacturing and logistics sectors.

The current addressable market is still dominated by unorganized services providers, accounting for nearly 65 per cent of the market size Vs the 35 per cent that is shared amongst organized service providers such as SILA. As the country develops, the balance between the unorganized to the organized players will flip, resulting in large opportunities and consolidation of the service provider/supply side.

Tell us your future plans for the market?

We recently acquired Forbes Facility Services from the Shapoorji Pallonji Group, with this we aim to leverage the team synergies, synergies across geographies and sectors. The incoming team's experience, aided by our proprietary-technology, SILA Connect, will enable us to scale efficiently. This deal will also help expand our portfolio within the high-growth sectors of industrial, manufacturing and warehousing across India and add new services to our current offering. We look forward to growing organically and inorganically across markets and newer investment opportunities.

Your app SILA connect - how does that help your clients?

SILA connect is our in-house technology used for efficient management. Through the app, clients can automate many processes including employee management processes such as compliance, attendance and employee background verification management. Additionally, SILA connect goes one step ahead to offer clients immediate access to all payroll compliance documentation.

Through SILA Connect, clients can digitize, optimize, and measure site operations, effectively while having real time access to employee progress. SILA Connect also offers an option to track checklists through a simple QR code scanning and real time photographs.

Lastly, clients can alert SILA's team of any issues through the in-built ticketing system and the app also has a built in inventory and asset management module. SILA connect can be used for effective cleaning, hygiene, air quality and energy management.

Tell us about how technology is a game changer in this space?

The usage of IoT and AI is still at a nascent stage across the real estate industry. Globally, prop-tech has been slow to scale relative to fin-tech, food-tech, and technology driven logistics companies.

We at SILA are currently working with an in-house tech-team and partners to bridge this gap to derive a solution that will eventually help reduce operating costs, improve safety, and achieve data-driven decision-making. Over the past couple of years, we have started using IoT, AI based technology and robotics while maintaining assets, especially in newer developments.

With a return to office and the demand to maintain safe and sanitized physical environments, usage of smart sensor-based technology has been on the rise. Robotic technology has also started being used at facilities. We have recently used cleaning robots at offices occupied by Goldman Sachs and some of JSW Steel's industrial facilities. Technology adoption along with a focused effort towards ESG and sustainability initiatives will drive the growth of companies in the sector going forward.

What is the scope that micro markets like Hyderabad, Bangalore bring to the table for facility management?

Hyderabad is a huge market, for the industry and for us. Hyderabad has been the fastest growing market for office and commercial space over the past few years. The city is expected to have approximately 100 million sqft of commercial office space by next year. As a result of this, it's the fastest growing market for facilities management services providers too.

Similarly, Chennai is a fast-growing market for us as well. SILA has done exceeding well in Chennai over the past couple of years, and we expect this trend to continue. As a group, SILA has a strong presence in the IT/ITES belts in Chennai, and our subsidiary - Forbes Facilities Services, has large and growing presence in the Industrial belts in Tamil Nadu, catering to various auto and auto-ancillary manufacturers.

The facility management market has a lot to do with the unorganised sector, how is SILA making a change here?

The facility management market is still pre-dominantly an unorganized. Organized providers like SILA, account for only 35 per cent of the total facilities management market share. The balance 65 per cent is serviced by smaller unorganized companies and professionals. However, this ratio will reverse over the next decade.

Over the past decade, organized facility management companies have increased their presence within the larger facility management sector. As a result of this, the labour force that traditionally worked with unorganized or non-complaint service providers are given an opportunity to work with companies that adhere to labour laws and offer them benefits that they didn't receive earlier in their careers.

At SILA, our people are our biggest assets. We now have a workforce of over 15,000 employees as a group and have taken several steps to give back to our employees. In addition to adhering to compliances and providing all the statutory benefits, we have set up a foundation called the 'SILA for Change Foundation' that focuses on educating the children of our unskilled workforce. We strongly believe in the power of education, and our endeavor is to make education accessible to as many families as we can via our foundation.