Modular housing work
is gaining pace with a series of new deals that are providing a boost for
offsite manufacturing in the residential sector.
Ilke Homes has won
what is believed to be the biggest single modular housing contract with a £100
million deal to supply 750 modular homes for social housing giant, Places for
People (Glenigan Project ID: 19181842).
Ilke chairman Dave
Sheridan said: “Ride-hailing apps have replaced standing in the rain to flag
taxis, so it makes sense that we embrace the benefits of manufacturing homes in
dry factories. A mature OSM [off site manufacturing] market could create an “Uber
moment” for construction, speeding up delivery, cutting cost and giving our
customers unrivalled choice and quality.”
Ilke is a joint
venture between housebuilder Keepmoat and offsite specialist Elliott Group and
only opened its 25,000 sq m factory opens in Harrogate last year.
Glenigan’s
construction research shows that Ilke is working on a number of other
developments including 119 units at Millwood in Liverpool Glenigan
Project ID: 17005870) and 54 homes at Firs Farm in West Sussex (Glenigan
Glenigan Project ID: 18435714).
The Ilke deal
followed an announcement that Urban Splash, which also only moved into modular
housing last year, has formed a partnership with Japan’s biggest housebuilder,
Sekisui House.
Sekisui House have
invested £22 million of new equity in return for a 35% stake in Urban Splash’s
modular business, House.
A further £30
million of equity and debt funding will come from the Government’s Home
Building Fund, which is administered through Homes England.
Sekisui
House president Yoshihiro Nakai, said: “Using modern methods of
construction to build high quality homes with short build times is one of our
company’s great strengths. Our technology and know-how can help resolve
pressing social issues in the UK.”
Manchester-based
residential developer Urban Splash moved into modular housing with last year’s
acquisition of the loss-making Building Systems business from materials group
SIG.
Building Systems had
revenue of £9.2 million in 2016 but lost £5.7 million and Urban Splash paid
just £1 in a deal which included a factory employing 70 staff at Alfreton in
the East Midlands.
Just weeks after
confirming the Sekisui deal, Urban Splash announced a £75 million deal to
supply 440 modular homes for Homes England at Northstowe (Glenigan Project ID:
1903816).
Insurance company
Legal & General is also investing modular housing and has built a factory
outside Leeds that will be churning out more than 3,000 homes a year by
2022, mainly for the affordable housing sector.
“Affordable housing
is a classic example of under-investment with minimal new equity capital being
deployed to the sector,” said L&G chief executive Nigel Wilson last year.
Persimmon’s modular
housing business Space4 is also expanding. Space 4 delivers around delivered
6,000 timber frame house kits and insulated roof systems to Persimmon’s housing
businesses form a factory at Castle Bromwich near Birmingham.
Production is now
being expanded to 9,500 units per year- 7,750 timber frames and 1,750 roof
systems, providing further evidence of the increased demand for modular housing
as skills shortages bit in the run-up to Brexit.
