Sums of the Parts: How to Make Money from Modular Construction in the UK

 

In the UK’s current economic climate, and with narrow construction-industry margins, taking a similar approach to modular construction – “If you build a factory, the business will come” – is more risky.

Plenty of firms are entering the market. In February, Berkeley Homes submitted plans to build a modular factory in Hoo, Kent, capable of turning out 1,000 homes per year. And last November, US-based Volumetric Building Companies announced an expansion into the UK with a “dedicated management team” in-country, and the firm plans to secure offsite-manufacturing capabilities.

Not all recent sailing has been smooth, though. In May last year, modular construction firm US House Group fell into administration due to the underuse of its factory, with up to 160 jobs lost. Two months later, Countryside announced that it would close its offsite factory in Bardon, Leicestershire, which only opened in 2021, after its profit plummeted. Countryside was subsequently acquired by Vistry, which pledged in January this year to keep the factory open.

Meanwhile, Caledonian Modular entered administration in March last year before being bought out by JRL Group, while fellow specialist Mid Group collapsed last July.

So what are the pitfalls that must be avoided in such a turbulent operating climate to increase the chances of success for firms investing in modular construction?

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