Modern Methods of construction (MMC) centre on the new ways construction is carried in the modern era. Like every other industry, the construction industry is not left out of the chain of innovations occurring. Particularly, construction has been witnessing innovations to meet the 21st century needs of sustainability and efficiency.
But, what exactly are modern methods of construction? According to Goconstruct, MMC is a process that focuses on off-site construction techniques, such as mass production and factory assembly, as alternatives to traditional building. This process seeks to produce home with better quality in line with sustainable standards and in less time than the traditional means of construction.
In light of this novel method of construction, what does this mean for construction in the Build to Rent industry? And BtR investors benefit from embracing this MMC in the development of their schemes.
Five Advantages Modern Methods of Construction to Build to Rent Investors
Speed of Delivery and Increase IRR – Internal Rate of Return
MMC is known for its fast construction process, as the building is constructed in an off-site factory under controlled plant conditions and are easily assembled on-site. One of the most popular forms of MMC is the modular construction process. In this construction process, sections or modules of a building is constructed off-site using the same materials and designing to the same codes of standards as conventionally built facilities.
Although MMC might be expensive in comparison to conventionally construction methods, it makes up for it in the speed of delivery. Speed of construction is a factor that is beneficial to long-term housing investment like BtR, as it can significantly improve BtR financial metrics like the Internal Rate of Return (IRR).
IRR is commonly used as a measure of investment performance in commercial real estate. The IRR percentage of any development is one of the most central factors when considering the suitability of a prospective development in the Build to Rent industry. Simply put, IRR is an estimate of a prospective investment’s profitability; it can also be used interchangeably with the term interest rate.
Basically, the advantage a faster construction period offers is that the rental income stream is more accelerated. Also, the MMC speeds up the Yield metrics on Build to Rent developments, as schemes are completed ahead of schedule, making it easy to get the BtR fully occupied.
Less Waste and More Accurate Budgeting and For Casing
Another important benefit of MMC is its reduced waste of resources like water, construction materials and more. This is possible since MMC processes are conducted in a controlled plant condition, which reduces the waste of resources, creates fewer disturbances at the site, and it is environmentally friendly.
Unlike conventional construction carried out on-site, the waste margin is compared MMC is a wide one, as it is easier to manage waste in a factory environment than the construction site. Through this efficient use of construction materials and waste management BTR investors can significantly save on extra construction costs. Thus, allowing investors to stay within the budgeted costs since unforeseen waste is reduced drastically.
This provides investors with a more accurate BtR construction budgeting, allowing them to divert their funds more efficiently.
Less Human Risk of Health and Safety Issues
Despite the advancements in the health and safety of workers in the construction industry, it still remains one of the industries with high rates of work-related injuries and fatalities. This is common with conventional methods of construction. MMC’s controlled off-site construction provides a safer solution to constructing these mega structures with less human risk.
Off-site construction offers safer working conditions since safety requirements are met and ensured to be done. Also, the danger of working great heights is reduced, as workers cannot fall off heights, easily as in traditional construction because the building is built in modules or sections.
More Sustainable
With the rising concerns on climate change and environmental protection, MMC poses a practical and sustainable solution to hazardous emissions from construction. In the lifespan of a BtR development, the construction stage is a period that contributes the most to climate degradation. The carbon emitted and water wasted during the construction is significant, as the conventional construction industry accounts for 23% of the global carbon emissions.
By embracing the MMC in the development of BtR schemes, investors can easily comply with the global treaties on carbon emissions and sustainable practices. Also, sustainable construction is a feature that is appealing to the new generation of environmentally conscious renters. This makes BtR schemes an attractive option that can drive the needed change towards sustainability.
Increase Quality Finish
MMC offers a more quality finish compared to conventional construction, due to the sustainable practices used in the construction process. Buildings built using MMC are known to be more efficient in energy consumption and operational costs.
Also, MMC BtR schemes can be easily assembled and dissembled for possible refurbishment. For BtR schemes to stay competitive, they are required to stay up to date with the changing designs and furnishing. MMC offers BtR investors an easy means to undergo renovations at an affordable cost compared to traditional construction.
Conclusion
MMC is already taking ground in the BtR industry, with several BtR developers building MMC BtR schemes. For example, Essential Living has completed the first modular BtR scheme in Greenwich, known as Union Wharf. Also, Legal and General has set up its own modular housing factory while US multifamily giant Greystar has funded the delivery of the world’s tallest modular residential towers in Croydon.
Subscribe
Every Friday we send an email with that weeks published posts. Subscribe to our weekly newsletter to make sure you don’t miss a thing.
