Developers are increasingly meeting the demand for sustainable, cost-effective apartments by building on a factory floor. The prefab panel construction approach has been a growing market for a decade and, according to reports, will continue to impact the residential marketplace well into the next decade.
The “Global Modular and Prefabricated Buildings Market, Forecast to 2025” report from Research And Markets shows the modular and prefabricated building market is currently at a nascent stage when compared to traditional building construction; however, the market is developing rapidly and leading to increasing penetration of modular buildings within the construction sector.
Rising construction spending is expected to drive the growth of this market but developers are looking to reduce construction deadlines and decrease the cost of construction, too. This preference has led to the development of prefabricated and modular buildings, as buildings made in a factory environment use less labor and time for overall construction leading to both time and cost savings. This factor is expected to be a key growth driver for the market.
Currently the market gets a large portion of its revenue from the non-residential construction segment; significant growth in the development of commercial construction especially propels the growth of this market in regions such as the Middle-East, Europe, Latin-America, and Asia-Pacific.
In the North American market, wood is a preferred material for prefabricated construction because it is a recyclable material with comparable strength to concrete and has a lightweight nature that allows for easier installation. However, in Asia-Pacific and the Middle East, the material preference mimics traditional construction; a high volume of steel and concrete is used.
Apart from competition within the segment, prefabricated manufacturers also face competition from traditional construction especially in regions where construction labor is cheap, thereby bringing down the total cost.
The larger market participants increasingly engage in mergers and acquisitions and joint ventures among themselves and with small companies to acquire new products, technologies, and market shares, pointing toward further consolidation. And it’s not only construction-oriented companies that are getting involved. A major design software firm, invested in a prefabricated building manufacturer, Factory_OS, leading to the further propagation of DfMA (Design for Manufacturing and Assembly) trends in the construction industry.
Although many companies are in this market, or starting to explore it, more established firms are taking advantage of the growth being seen. As an example, Bensonwood, a New Hampshire-based prefab builder, recently completed a third multifamily development built with its Tektoniks line of eco prefab structural panels. This milestone for the company, which recently expanded its prefabrication facilities to bring high performance, sustainable architecture to the mainstream, is part of its “going green” initiative.
With leaders across the globe vowing to make buildings carbon neutral by 2050, Bensonwood’s building system is gaining popularity among green architects and developers tasked with lowering C02 expenditures in new construction. By using materials that naturally sequester carbon and insulating with high-density cellulose—a material made from recycled newspaper—Bensonwood panels have low embodied energy and are extremely sustainable to build.
Off-site manufacturing, meanwhile, delivers a high level of precision, so units designed with Bensonwood’s insulated panels are tightly sealed, all but eliminating air leaks and thereby reducing the amount of energy it takes to heat and cool. Another value of prefab is the speed in which buildings can be erected on site. Using prefab panels typically shaves months off the construction process, greatly reducing overall costs. Proponents say the process is also quieter than traditional building—a huge plus for developers seeking building approval in existing neighborhoods.
Because Bensonwood’s thermally complete panels are built inside a climate-controlled facility, there is virtually no risk of mold or other contamination—a common problem on traditional builds where materials are exposed to the elements during the construction process.
While some of the first eco prefab apartment projects have been geared toward higher-end renters, the increased adoption of this technology will continue to drive prices down. The company reports it has already begun experiencing greater efficiency as manufacturing has been brought up to full speed.
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