PPPs to Bolster Growth in the South African Facilities Management Market, Finds Frost & Sullivan

CAPE TOWN, South Africa, May 24, 2010 - Public-private partnerships (PPPs) are creating significant opportunities
for growth within the South African facilities management market. Although
the market currently remains unrecognised as a formal industry, the South
African Government has acknowledged the benefits of professionally managed
facilities through the adoption of the Immovable Asset Act of 2007.

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New analysis from Frost & Sullivan
(www.buildingtechnologies.frost.com), South African Market for
Facilities Management, finds that the market earned revenues of $587.3
million in 2008 and estimates this to reach $1.1 billion in 2015. The market
is divided into commercial, public and industrial end-user sectors.

If you are interested more information on this study, please send an
e-mail to Patrick Cairns, Corporate Communications, at
patrick.cairns@frost.com, with your full name, company name, title, telephone
number, company e-mail address, company website, city, state and country.

"The main driver of growth in this market is the increasing number of
PPPs with facilities management requirements," says Frost & Sullivan Research
Analyst Linda Harding. "The high demand for facilities management services is
likely to expedite the formalisation and regulation of the facilities
management market in South Africa, along with greater job prospects."

There has been an increase in the number of concessionary agreements with
specific facilities management requirements every year. This is as a result
of government acknowledging that they do not necessarily possess the skills
and capabilities to run their facilities effectively and at the lowest cost.
These agreements often have strict equity requirements and therefore only
those facilities' management providers who are willing to take on risks will
be able to capitalise on these growth opportunities.

In 2005, only three PPPs were approved. They included specific facilities
management requirements at the sanction phase. In 2008, more than ten
concessionary agreements, that included facilities management requirements,
were in varying stages of approval.

Whilst outsourcing non-core operations offers many advantages, such as
cost savings and efficient management of assets and facilities, most
end-users are unaware of these possibilities because the facilities
management market is still unrecognised as a formal industry. Furthermore,
some companies are unwilling to engage in the process as there is a stigma
attached to outsourcing - namely that it leads to job losses within the
company.

"A mere 30 percent of facilities management is currently outsourced,
leading to fierce competition amongst service providers for shares of a
limited market," explains Harding. "The concept of facilities management is
largely misunderstood to imply a loss of jobs due to outsourcing, and, as
such, the demand for services continues to be low."

Offering clients a professional and reliable facilities management
service, with a measurable value addition is not only essential for securing
contracts, but also critical in fostering customer loyalty. Establishing a
strong and trustworthy reputation through professionally rendered services
will guarantee a strong market share to the service provider and ultimately
provide maximum value to the client.

"Despite the low awareness amongst end-users, the demand for facilities
management services within the public sector is expected to contribute
significantly towards the understanding of its benefits and growth in all
sectors," concludes Harding. "The rising demand for facilities management
services will accelerate the process of formalising the industry and regulate
competition levels, which will result in the formation of several innovative
businesses and job opportunities."

South African Market for Facilities Management is part of the Building
Management Technologies Growth Partnership Services programme, which also
includes research in the following markets: South African Building Management
Systems, South African HVAC Market, and South African Lighting Controls
Market. All research services included in subscriptions provide detailed
market opportunities and industry trends that have been evaluated following
extensive interviews with market participants.

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    South African Market for Facilities Management
    M518

    Contact:
    Patrick Cairns
    Corporate Communications - Africa
    P: +27-18-464-2402
    E: patrick.cairns@frost.com

www.frost.com

Patrick Cairns, Corporate Communications - Africa of Frost & Sullivan, +27-18-464-2402, patrick.cairns at frost.com