Total Property - Issue 8 2018
Until recently, ‘modular construction’ may have evoked images of boxy, utilitarian overflow classrooms, and ’prefabricated’ an inevitable sacrifice in style.
In the past few years, developers have become more receptive to offsite construction and designers are learning that prefabrication provides flexibility without constraining creativity.
The industry has been delivered a big boost with the erection of the country's first modular hotel in Christchurch and Housing Minister Phil Twyford's KiwiBuild push to build 10,000 new houses a year over the next decade, which he says can only happen with the use of modular construction.
New Zealand now has 26 prefabrication companies, though a few have closed in the past couple of years. A planned 36,000m2 panelised facility is expected to open within the next two years capable of producing between 1,700 and 4,000 fully-completed homes a year.
There are major timber cross-lamination plants in Nelson and another planned to open next year in Rotorua, which will be geared up to help the modular construction industry.
While the construction industry is keen on prefabrication, behind the scenes there are reports of resistance and wariness about adopting new systems among objectors and elements within local councils.
Twyford has been sent a strong message from the prefabrication industry that the consenting system is “broken”.
“To transform any market it needs a bigger percentage and a lot of people moving in the same direction,” says TLC Modular managing director Alistair Sawer.
Coming hard up against the current challenges, TLC Modular built the entire 88-room, 3,555m2 Cosa Hotel, located on a 1,300m2 site on the corner of Colombo and Salisbury Streets, Christchurch, in its Vietnamese factory.
What Sawer envisaged as a 12-month project ended up taking two-and-a-half years because of consent problems.
The hotel was shipped to Christchurch in 17m-long double room and corridor modules. Shipping took 18 days and comprised about 7 percent of the building's cost.
The finished room modules include all fixtures, fittings and furniture. The only items to be installed are a television and the gassing of the air-conditioning system.
Long-time hotel owners Gary and Ann LePine's Lepton Holdings had the Cosa site before the Canterbury earthquakes and had been looking for a prefab contractor in Asia as it couldn't make a traditionally built hotel stack up financially.
It is TLC's first major project in New Zealand, though it has been active in Vietnam, Singapore and the UK for a decade.
Cosa's $12.5 million build cost is 10 to 20 percent cheaper than a traditional New Zealand build.
Labour and materials are the main sources of savings in offshore modular construction. Raw materials are 30 to 70 percent cheaper offshore.
The only component of the Cosa hotel build bought in New Zealand is electrical cabling, considered the “riskiest” part of a building.
Sawer says the cost of building hotels in New Zealand is ridiculous. “Australia is 30 percent cheaper, as is Singapore.” A modular 1,200-room hotel in Vietnam costs $1,200/m2 to build. In New Zealand it is just under $3,000/m2, while traditional building is $3,500-$4,000/m2. The result is that many hotel owners cannot make a traditional build stack up economically.
Apart from cost savings, the benefits of modular building include the ability to carry out site works preparation and construction of the lift core at the same time as the building is prefabricated offshore. The process also minimises site traffic disruption, and dust and noise nuisances.
In addition to its first hotel in New Zealand, TLC now has two 200-room hotels to build in its Vietnamese factory for sites in Queenstown, and inquiries for townhouses and other residential projects. It is considering setting up a secondary factory in New Zealand.
Sawer says it will take 10 major overseas fabricators to set up here, in conjunction with local operations, to try to achieve the KiwiBuild targets and other commercial projects.
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