The Future is Modular
Modular off-site construction is an innovative solution for the delivery of high-quality temporary and permanent structures. It represents an advanced, cost-effective alternative to conventional building practices and provides a fast route to market for public sector bodies needing to buy or lease premises.
The Crown Commercial Service (CCS)
The modular revolution has been given a significant boost by the announcement from the CCS that it will shortly be inviting bids for contractors and suppliers to get involved in a new £10 billion offsite framework for public sector projects. The new arrangement, known as Offsite Construction Solutions (OCS), is a significant step up from the existing modular buildings agreement which was made three years ago. The earlier provision had 23 participants, including five major companies, Wernick, Portakabin, McAvoy, Elliott and Caledonian, and was worth just £500 million.
The duration of the new OCS will be seven years and it has been designed to supersede all existing sector deals. Detailed information will be disseminated to interested parties in the first few months of 2022 with procurement documents ready by the summer and the framework award finalised and announced in January 2023.
It is a substantial undertaking, which will become the default construction solution for government departments and the wider public sector, including bodies involved in local government, healthcare, the emergency services, housing associations, the education system and the charity sector. Adoption of the modular off-site model by these major state institutions signals a sea change in the construction industry.
Japanese Modular Housebuilder Invests in the UK
Sekisui is a Japanese company with an impressive track record in modular home building which is playing a major part in shifting this method of off-site construction from a specialist sector to the mainstream. Its UK arm, Sekisui House UK, has just received an £11.5 million investment from its parent company.
Until now, Sekisui's performance in the UL modular market has been mixed. Its joint venture with Homes England and Urban Splash - Urban Splash House Holdings - has seen sales which it describes as 'sluggish'. It reported losses of nearly £4 million last year, which was largely attributable to construction delays caused by the pandemic.
Despite its losses, the JV did deliver homes in Warrington, Merseyside, Manchester, Cambridge and Birmingham. Undeterred by its shaky start and the poor return on its initial £22 million investment, Sekisui forecasts a much better set of figures for 2022 with its work in progress estimated to be worth £25.6 million.
Other companies are displaying similar faith in the future of modular construction, with both L&G and Ilke showing a willingness to play the long game despite early losses. Now that the government has officially confirmed its long-awaited OCS we can expect to see much more activity in this part of the construction industry.
Horizon 120 in Braintree
While housing has been an important area for modular construction, the government's new initiative turns the focus back onto municipal, commercial and industrial developments. An illustration of this can be seen in Weston Group's new project in Braintree, Essex. The house builder has begun work on an offsite panel manufacturing and distribution centre named Horizon 120. The 137,000 square foot factory is expected to open by the end of 2022. Under the guidance of Weston's Swedish partner Randek the facility will create 80 permanent jobs in the manufacture of components for new homes such as walls, roofs, floors, bathroom, kitchen and bedroom components. Off-site construction is set to become the most significant growth area in the industry during 2022.