With the market for Off-Site Residential Solutions increasing and with notable industry experts tipping that the sector stands only to grow further in the next 5 years, it is has never been more important for Residential Providers (RP’s) to understand how to leverage an off-site project to grow their market share and margin.
Here’s our 14 best insights that all residential developers should know: –
1. The Offsite market generally splits into 2 key value propositions
The offsite manufacturer and the offsite contractor, so it’s important for RP’s to understand their needs – Offsite Contractors (like M-AR) manufacture as well as provide a wider service to offer turnkey design and build packages to suit your delivery intent. Turnkey works well for encapsulating developer risk and allows you to choose how much of their services suit your individual needs. Manufacturers tend only to focus on designing, supplying and assembling their product on your site leaving the Groundworks/preparation and wider pre-construction phases to the customer.
2. Offsite Accreditations are Powerful in Securing Support from Lenders
Never underestimate the need for your offsite provider to be accredited to ensure you’re in safe hands and to ensure the final build stands the test of time for lenders and your customers. The most powerful accreditation in the market place is BOPAS (BuildOffsite Property Assurance Scheme – www.bopas.org). BOPAS rigorously assesses (via Lloyds Register) offsite providers via Lloyds Register on their abilities to design, manufacture and construct offsite residential solutions that achieve a minimum 60 year life. BOPAS bolts neatly into a structural warranty from Building Life Plans (backed by Allianz) with BOPAS also supported by the CML (Council of Mortgage Lenders). Other accreditations of note include ISO 9001, 14001 and 45001, and ensuring all offsite products conform to British Standards and Building Regulations.
3. Not all Offsite Solutions are equal in Delivering what you actually need!
Defeat the risk of wasted time with a detailed customer brief. We always ask our new customers to try to refrain from prescribing the nuts and bolts (that’s what your good offsite provider will do for you), but instead we ask them to speak to us in clear terms regarding what you value from a supplier relationship, the performance requirements for your product, the anticipated volume you expect to deliver, your price points and your programme pressures as these insights allow us to tailor our approach from the outset of our relationship. Once your brief is cast, you’ll find many options on the market place and this allows you to explore the market and review a range of system solutions including modular, panellised, CLT, light gauge steel frame, SIPS or a combination of all alongside existing traditional solutions (often called hybrids!).
4. Look for flexibility in the product offered, not a “cookie cutter” offering from a brochure
We will level with you….the offsite market works best on standardisation and volume as this brings efficiency to the process that generates savings that can be passed back to you as the consumer… however you should never feel compromised to accept a provider’s offering if it adversely compromises your offering to your clientele. We encourage RP’s to find suppliers who offer flexibility in their product that optimises sizes, layouts and finishes to complement your needs rather than picking from a limited brochure. A collaborative team effort to find the optimum solution can then be sought, and you’ll see how customisation affects the build price to enable you to make an informed decision.
5. Going “all in” on an offsite solution won’t provide a silver bullet on every project
Offsite works well in many environments, but with the increase in mixed use developments requiring ranges of options and styles, its not reasonable to think offsite works everywhere. Our advice is to take advice from a friendly offsite provider and talk through the merits, harnessing the best of offsite where it is best applied.
6. Partnerships have never been more important for success
The decision to move into offsite delivery shouldn’t be seen as a one off transaction; more the start of a relationship between you and your supplier. Any supplier worth their salt will be working hard to realise your needs and understand how they can manufacture the best possible product, they will be using manufacturing principles to refine your product through the process and understand how best to serve you next time around. Finding an honest, open team of professional enthausiasts within your supplier will be worth it’s weight in gold!
7. Surround yourself with forward thinking advisors who review the entire business case
The offsite business case doesn’t always fit traditional, well trodden cost and design models and can often fail to fully encapsulate the full benefits and drawbacks to offsite delivery. New thinking is often needed from RP consultants to assess the advantages and disadvantages on your behalf. Inserting your new trusted offsite provider into this team at an early (and no obligation stage!) will help your advisers offer you better cost plans, reduced risk registers and designs that work around leveraging the best offsite approach, meaning better developments and improved commercial performance.
8. Take support from Homes England
Homes England have many opportunities for collaboration if you are considering funding options and offsite for your developments. Their mission is to accelerate the housing delivery to 300,000 homes a year and they feel an offsite “MMC” approach will aid this…recent news clips show they are truly putting their money where their mouth is to stimulate offsite housing delivery.
9. Leverage the programme benefits to speed up your return on investment and grow market share
Traditionally delivered projects often result in delays…annoying at best but business ending at worst as the costs begin to spiral, sales receipts are delayed and funders become impatient on their promised returns. We recommend you de-risk this by using offsite and use the inherent programme benefits to realise a return on your investment much sooner. This means you can do more business as the predictability of cash flow allows your re-investment in more developments. Naturally, the more completed the system leaves the factory, the more certainty on programme you’ll usually get and the faster the till starts ringing for sales and rental income.
10. Ignore Utility Connections at your peril!
Many fast track offsite projects are scuppered as a result of the statutory electricity, water, gas, sewerage and telecomms delays. In our experience, these risks often feature too low down the priority list for many RP’s who struggle to comprehend the speed that offsite can achieve; take active steps during pre-construction to align the infrastructure programme with the expedited construction programme…or better still, pass that on to your friendly offsite provider to manage on your behalf!
11. See and Feel the Product if you’re on the fence as to quality in delivery
Never rely on sales literature or salesman spiel to tell you what you want to hear. We recommend you see and feel the products from your supplier and investigate their show homes and completed projects; beyond this always speak with their previous customers to ensure your provider will live up to their promises in quality and service!
12. Consider joint venture opportunities with your offsite partner
Many offsite providers want to do business, and may be able to help realise projects with you by inserting funding or service provision (using their internal team of specialists) to finance the early stages of the project in partnership with you, lowering your financial exposure before planning permission is granted.
13. Futureproofing for new generations
It’s amazing how well offsite houses lend themselves to being future proofed for future extension/ adaption as the owner’s life changes….a good offsite provider will work with you to design and manufacture to allow for future conservatories, loft extensions and reasonable changes in use indeed, our ASA light gauge steel modular system has non-structural internal walls, allowing for layout changes without the need for structural adaption in later years!
14. Goodbye to the “Sales Suite” cabin on site and Hello new customer experience!…
Show homes can be expedited quickly with the right provider, maximising the time for sales from site establishment! Perhaps your Sales Teams could even engage your customers to visit their home “in production” at the factory, offering a new and exciting customer experience that sets you apart from the rest!
Thank you for reading!
Talk to us about your next project
We’ll get back to you within one working day