Right now, the benefits of BTR as a tool for addressing the current housing crisis are becoming very widely accepted. This is the case even though some technical, political, and commercial challenges have made it difficult to recognise BTR as an asset class. Similarly, fully modular construction, also not a commonly recognised form on construction in the UK (yet!) is fast becoming recognised for its sustainability & cost saving benefits. This article delves into how marrying BTR with Modular construction could be the answer the industry is looking for.
Modular in the UK
Modular construction has a long history. The first modular building was developed by Henry Manning, a carpenter from London. Instigated by Henry’s son emigrating to Australia in the mid 1800’s. Henry wanted to send him off with a house he could assemble himself when he got there.
This design developed & over time became popular post-WW11 – since it was a quick & cheap way to rebuild homes that had been destroyed. However, in the long run, ‘prefabs’ developed a reputation for being bad quality. This was largely a result of the residential homes not being built with longevity in mind. But, due to this reputational damage, modular construction was not used as a mainstream method of residential building in the UK.
Today however, opinions are changing. With the help of modern day tech, prefabs are getting a makeover and modular is paving the way in efficiency, cost saving, speed & sustainability. Attributes that make it perfect for BTR, let’s explore these further.
BTR’s Need for Speed
BTR financials, particularly the internal rate of return (IRR), depend on quick delivery of the development. Building modular offsite, allows for construction to continue without being weather dependent. Very helpful here in the UK! Furthermore, with offsite production in the right location, noise needn’t be an issue – making shift work patterns possible. Parts of the build can be in production round the clock, bringing top out dates closer than previously imagined.
Try Before You Buy
Modular construction comes in all shapes and sizes, from entire apartments to bathroom or kitchen pods. As a result, developers can soft test how the integration of modular within their build works. They can include a small modular component before moving to more significant aspects of the project. Testing in this way ensures the end product is exactly as desired before going on to be created on a larger scale. Guaranteeing no too-late-to-change oversights & delivering the high end spec associated with BTR.
Waste Not, Want Not
Sadly, the construction industry is one of the largest contributors of co2 emissions in the UK. 10% of all co2 emissions come directly from the construction industry. When we pair that with the knowledge that 13% of all construction materials delivered to site go directly to landfill without ever having been used, we see the real need for change. Constructing offsite means a big reduction in waste. No more guess work, estimations or projections. The factories hold the materials & will continue to do so for future projects if not used. You pay for what you use & what you don’t use is repurposed. It’s a win win.
We know that BTR habitants are aware of their impact on the world & feel more positively about companies who act on these interests. Reducing the impact of the build through both short term (development) and long term (running efficiencies) is both beneficial for the business and the planet.
BTR & Modular Champions
We have highlighted the 3 below companies as champions, as we feel they have had success with their use of modular within BTR.
1. Greystar Real Estate Partners
Greystar made their mark in the UK, when they built the world’s tallest modular constructed building in Croydon, London. (Now beaten by Clemont Canopy in Singapore).
Greystar and Henderson Park jointly purchased the project for around £180m. The tallest building is 44 storey’s tall & in total both provide 546 BTR units.
Contractors Tide claim reduced staff on site, 150 instead of 450. Furthermore, 50 workers were able to complete 38 modules a week! Speed aside, Tide also claim an 80% reduction in waste.
2. Vertus (Canary Wharf Group)
Vertus have harnessed the benefits of modular construction with the use of bathroom pods in their Wood Wharf site. Offsite Solutions were awarded the contract to provide 443 bathroom pods. And there can be no question regarding quality.
3. Grainger
Grainger have also had success with modular bathroom pods. Hundreds of them were installed at their Clipper Quay site in Manchester by Sir Robert McAlpine.
But, there’s a special USP at play here. One that’s more relevant in the modern day Covid world! Maintenance are able to access & service these bathrooms without even entering the flat! All of the required access panels are in the corridors. A trait that was very much ahead of its time.
Conclusion
Conclusively, BTR and modular construction are the perfect couple! When the benefits of efficiency, spec, waste reduction, labour reduction & speed are considered, modular construction is unbeatable. And we haven’t even touched on the added safety it delivers for workers.
At UK Build to Rent, we believe that within the next 5 – 10 years, BTR will be the catalyst that makes modular construction the favoured methodology for all residential developments within the UK.
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