Featured in Marshall White Project News: Does investing in prefabricated construction stack up?

Despite advances in technology and its increasing popularity amongst the development community, for many people “prefabricated construction” still means stuffy school portables, recycled shipping containers or cheap backyard granny flats.  It’s therefore understandable that purchasers in the market for modern, luxury apartments might be apprehensive upon finding out that their new investment will be built “prefab”. 

The new crop of modular builders, however, are slowly changing these attitudes, using off-site building methods to produce incredibly high quality new developments – from single storey houses to multi-storey hotels and soon, entire residential skyscrapers. What we’re achieving here in Australia is starting to capture the attention of the rest of the world, with Hickory fortunate to have gained international attention for our multi-storey modular projects, particularly a 9 level building that was erected in just 5 days last November.  Other low-rise modular builders are also doing remarkable things, including a company called Tektum that completed installation of an architectural cliff-top Sydney home in just 8 days.

Despite this international recognition, the adoption of modular construction practices have been slow to gain momentum here in Australia, whilst overseas it’s commonplace and in places like Japan, even highly sought after.  That’s because these countries understand that building large components in a factory makes sense for a lot of reasons.  For a start in the Northern Hemisphere, where snowy winters can halt construction for months on end, building in a factory means work can continue according to schedule without the hold up of inclement weather or limited hours of daylight. 

There’s also far greater quality control working on the ground floor of a factory than there is with workers and materials going up and down a high-rise building.  In a factory it’s much easier for managers to check for consistency, test components and rectify defects or issues before the building is completed. It’s also much safer for the workforce as they aren’t working at height or out in the elements everyday.

In Australia commercial construction companies are turning more and more frequently to the off-site prefabrication of major building components, and most people would be surprised to know just how much of an average high-rise building is constructed offsite.

The use of precast concrete panels is standard practice, with most construction methods utilising precast to form major elements of the building structure.  Steel frames and trusses are also largely built offsite and transported to the site, as are large sheets of window and curtain wall on tower projects.

At Hickory, we’ve taken prefab a step further, developing systems to build entire high-rise hospital buildings, apartments and hotels in a factory that are simply craned into plane and connected like giant Lego blocks on the building site.  Having been builders for over 20 years using conventional methods (we were the HIA’s largest apartment builder for 3 years running), we realised that there must be a better way to build that is kinder on the environment, safer, cheaper and faster. 

Whilst the bulk of our Hickory business is still based on traditional construction, we’re looking increasingly to “prefab” any elements we can in order to build more efficiently. This includes building modular bathrooms in a factory, called “pods”, that are completely tiled, fitted with cabinets, vanities and baths or showers, then simply craned into place on site and connected into electrical and plumbing services. 

For large-scale builders like us the use of bathroom pods makes a lot of sense; there are less people needed on the building site as all the skilled trades associated with a bathroom (tilers, glaziers, cabinet makers, shower screen installers, etc.) are now in a factory, and not taking up space on site.  That’s up to 12 trades that don’t need to go up and down the builders lifts, park their vehicles on site, or bring material deliveries to the building.  For people that live or work next to a construction site, prefabrication of bathrooms or even larger elements means the time it takes to construct the building can be halved.

But what does this all mean for investors or tenants in prefab apartments? Well for a start, if the entire structure of your building is prefabricated you get to move in 50% quicker than if your building was built using the old concrete and column method. There’s also a good chance your building will be more thermally efficient, so you’ll be able to wait a bit longer to turn on the heating in winter or the aircon in summer, saving money on your energy bills. The risk of builder’s defects requiring rectification can also be reduced with modular, as the quality control during construction is much more consistent.

If your building has used prefabricated Hickory bathrooms, they’ve been engineered using a patented, state-of-the-art new method of construction that produces the base of the bathroom from one continuous “monolithic” glass reinforced concrete piece.  The falls in the base for natural drainage are already predetermined, and every base is made from the same mold, so all bathrooms are safe guarded against leaks.  And because this method of construction saves time and money, the builder is often able to upgrade bathrooms elements at not extra cost to the developer or customer. For example, Hickory can offer a fully tiled bathroom for the exact same cost as a plaster bathroom. We also build our bathrooms with lightweight alucobond aluminum ceilings rather than the MDF ceilings that are generally used in bathrooms. This means we’re using aluminum and tiled elements in the apartment wet areas, which fare much better under moist conditions in the long-term than the plaster and paper products that are commonly used.

And for the environment, the benefits of modular construction are even more significant.  As materials are ordered cut to the right lengths, and material is warehouse and reused more commonly by modular builders than that of conventional construction firms, the amount of construction offcuts and waste can be reduced by up to 90%. To put that last figure into perspective, the Australian construction industry is the largest producer of waste annually (ahead of manufacturing, the services sector and Australia’s 7.8 million households). ABS statistics show the industry generated 19 million tonnes of waste in 2008-09 alone. By those calculations, if all building projects used prefab construction, this figure could be reduced to less than 2 million tonnes, and the overall amount of waste produced by the entire country in a year could be lowered by 25%.

Whilst the current uptake of prefabricated construction for residential buildings in Australia currently only stands at 3% of new projects, with any luck we will begin to catch up to some of our foreign counterparts (in Sweden it’s 74% and in Japan it’s 35%).  As technology advances and the world becomes more globalized, it’s inevitable new and improved construction methods will become increasingly commonplace in Australia. A part of this change will come from investors and new homeowners becoming more knowledgeable about new building methods, and banks becoming more comfortable lending to developers and building contractors that use these new construction methods. Education is also key, and in the last 2 years new bodies have emerged advocating modular construction methods, including PrefabAUS and META. The building and sustainability departments of many of Australia’s largest universities are also conducting research to help to drive this change.

As a property investor, being educated as to how buildings are made and the impact this has is a powerful tool, and embracing these new methods of production can ensure you receive a higher quality, more cost-effective and environmentally sustainable development.   When you think about the time, money and environmental savings these new construction methods can create, as well as the opportunities for the manufacturing sector, the benefits of prefab construction really do stack up. 


Featured in Marshall White Project Marketing Magazine, April Issue. 

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