BAM has announced that it is looking into the residential sector as a key area for its burgeoning modular construction expertise. It recently acquired a stake in an Irish modular-homes developer, adding to its existing manufacture / supply capability in the Netherlands. It follows Skanska's JV with IKEA, now making significant progress in the UK.
One of the key drivers for BAM's announcement is the fact that it expects 'strong, long-term demand' in the residential sector. A lack of 'at scale' pipeline has often been cited as a challenge and barrier to companies' investment into R&D required - as well as the manufacturing capability. Previously, only ambitious (and, crucially, well-funded) organisations have been able to afford the investment costs of making any significant steps towards a vertically integrated model that maximises the benefits of modular construction.
However, with a number of the key principles of the Construction Playbook putting the establishment of a commercial pipeline (along with the use of portfolios / programmes of works) at the forefront of decision making for publicly-procured projects, as well as building on the Government's 'presumption in favour of off-site', its seems confidence in a sustained order book seems to be growing.
It feels like we are at a tipping point that will see modular construction playing a huge part in the UK being able to meet its housing needs (currently estumated at 345,000 homes).
The contractor is looking at how it could capitalise on what it expects to be strong, long-term demand in the residential market. At this stage it is considering working with the public sector and housing associations as well as potentially alongside private developers. The firm has traditionally focused on commercial and public sector building projects. Chief executive James Wimpenny told Construction News that the firm is also looking at how it could use the offsite capabilities of the wider Royal Bam group in the UK market: “We are having a good look at it because we think it’s going to be a long-term market,” he said. “What we’re trying to do is figure out where there is a place in the market for a more sustainable, modular-type solution, rather than the traditional-type stuff,” he added.