Modular housing – balancing cost and value

Foreword

The virtues of modular construction and off-site manufacture have long been a source of debate. Now with more suppliers, better quality and the potential for substantial savings over traditional methods, could this approach finally achieve market success? We have created a cost model to look at the figures.

As many cities around the world face huge challenges in meeting housing demand, modular construction is seen as one of the keys to solving this crisis. Because they are factory made, the prefabricated units can achieve high standards of design and quality, and also offer speed and flexibility in onsite construction along with impressive cost savings.

Among the challenges for housing developers and providers is selecting the right modular system for their schemes. In recent decades large numbers of manufacturers have created a huge selection of options from volumetric systems and panel designs in a range of materials from steel and timber to concrete, and all with numerous options for finishes and fitouts. In addition, balancing cost and value plays a crucial role in decision making.

Economic advantages

Repetition is key to a successful modular construction scheme. Project teams should think of what is required when using bathroom pods in a traditional project and scale that up. The usual design and cost metrics apply, such as net-to-gross ratios.

Square buildings are particularly good for modular construction, and five-plus apartments per core should be targeted. Haulage is a cost to consider too, especially on a high-volume project. An alternative to remote production is to build a factory on site, space and logistics permitting.

There is the potential for big cost savings using modular construction. Pure modular projects can be completed in half the time of traditional schemes once on site. Fewer packages need to be bought – usually ground works / substructure, cores, stairs, apartment modules, shell and core MEP works, builders’ works, lifts and potentially balconies, roof finishes and the like, depending on the project.

As a result, prelims are much lower – usually around 12% for a 160-apartment scheme. This combination of fewer packages and simpler design also means costs are easier to predict.

To understand the economic advantages we have created a cost model based on a timber-frame modular scheme of 160 residential apartments in London.

Download here