Currently in British Columbia the rental property vacancy rate is less than 1 percent. This is inevitably creating a race to develop more product for the market. So what value do developers put on a fast tracked schedule? And what value is the early release of rental units to the market?
Developers want to deliver their product in the market as soon as possible to capitalize on the high demand, which means that when you’re considering which contractor to appoint, a faster schedule should carry a higher consideration, not only because of the additional rental income received but also because of the cost of capital and reduced risk of vacancy.
Prefabricating modules in a controlled factory environment allows the off-site construction of the modules and the on-site preparation to happen at the same time. For example, the foundations can be built at the same time as the framing, the top floor drywall can be installed at the same time as the ground floor modules, the first and second fix of the electrical installation is finished in the factory and even the roof can be pre-assembled while modules are being transported to the site.
It also enables multiple trades to be working within the confined spaces of many units at the same time – something that cannot be achieved on-site. When considering a bathroom, more than ten construction trades including electrical, plumbing, painting, tiling and millwork are required to finish the space. On-site, these trades have to work consecutively and cannot work in the same space at the same time, especially with the quantity of materials and tools each will require in that space. In a manufacturing environment, the trades have access to several bathrooms at the same time, with no need to have materials lifted up to the space and no ‘standing time’, which can use up a full day.
Most modular manufacturers have very stringent quality assurance processes, similar to other manufacturers. This can include inspecting and photographing details at every step of the process, from the number of nails used in the floor frame to how straight they are. Doing so reduces the punch list, which accounts for a large proportion of delays and rework on site.
Building off-site has proven to reduce a schedule, on average, by a third. For example, for every $100,000 of general conditions, $30,000 could be saved. In addition, the finance costs of that $30,000, the accelerated rental income, the reduction in insurance costs, the improved quality, the risk assessment of units remaining empty and the early availability of funds for another development should factor significantly into a willingness to consider a modular build.
If you’d like more information on how modular construction can shorten your time to market, please don’t hesitate to contact us.
Senior Business Development Manager