Mapeley is a substantial business with assets valued at more than �800 million and with annual revenues in excess of �250 million. It owns or leases more than 2000 sites around the UK and manages in excess of 2.2 million sq m. This has been achieved by the end of the first full year of trading.

What is Mapeley? An integrated, full-service outsourcing provider of commercial and government accommodation. Provides a solution that bridges the gap between Real Estate investors and FM providers.

What aspects of the business generate value?

  • Property - active management, development, acquisitions and disposals
  • FM - hard and soft; lifecycle work
  • Financial engineering - refinancing
  • Prospective earnings - add on services, additional clients

What are the prospects for growth?
Potential expansion through existing and new contracts is significant. Mapeley operates in an emerging market that has excellent growth prospects with few genuine competitors. The market has major barriers to entry - established by requiring capital strength and technical expertise.

Competitive Environment

  • Having established credibility, the corporate outsourcing market is currently experiencing high levels of interest
  • Convergence on an integrated solution appears to be emerging, albeit with few players providing a "one stop shop"

Real Estate Investors

 

Integrated Providers

 

FM Providers

Lehmans
MWB
London & Regional
Regus
Rotch
Goldman (Whitehall)

Mapeley

AMEC
Amey
Capita
Carillion
Rentokil
Serco
WS Atkins

Outsourcing Trends

Market Developments

 

Implications

  • Increasing size of PFI/outsourcing contracts (higher bidding costs, capital requirements)

  • Economic downturn putting pressure on both public sector (budgets squeezed by lower fiscal income) and corporates to seek cost savings and efficiencies via further outsourcing of non-core activities

  • Gradual increase in Total Facilities Managers (TFM), e.g. single contractors offering complete solutions within individual outsourcing segments (e.g. FM, IT, etc)

  • Lengthening of contract periods




  • Barriers to entry for smaller players lacking financial and personnel resources: increasingly suppliers need balance sheet capacity to absorb asset ownership

  • Ongoing outsourcing market growth throughout economic cycle: competition likely to be on quality/service innovation

  • Better pricing and improved level of service for the customers, and opportunity for the TFM to leverage further revenues off existing contracts, as well as increasing barriers to entry

  • Better visibility of earnings over time (thus better scope for funding), as well as giving service offering over the duration of the contract

Common Contract Features

  • Typical capital value �200m - �2bn
  • Mixture of freehold assets and leasehold liabilities
  • Minimum portfolio size 100,000m2 with diversified assets and liabilities
  • High quality credit counterparty
  • Minimum term of ten years
  • Opportunities to expand contract scope
  • Requirement for flexibility
  • Transfer of services (or near-term opportunity)