Ilke Homes: Second factory remains on the horizon + TopHat swoops for Airbus high-flyer
News, views and more from the modular construction space
Welcome back to Modular Monitor. We hope you’re managing to stay safe and well.
So what’s in store for 2021 in the world of MMC?
I’ve been speaking to one of the top team from industry giant Ilke Homes on how its plans are shaping up.
And in case you missed it, here’s our look at some key MMC moments from last year and how they might influence the next 12 months.
(If you’ve been forwarded this email, please hit subscribe below to get the next edition in your inbox)
*NEWS*
llke buoyed by “extremely healthy” pipeline as it eyes second factory
Modular giant Ilke Homes is anticipating opening a second factory by next year despite being partially affected by a slow market due to Covid-19, a senior executive has revealed.
Speaking exclusively to Modular Monitor this week, Matt Bench, Ilke’s executive director of growth and partnerships, said a second factory was at the “front of our thoughts” and discussions internally were on-going.
He said: “Will it be (open) this year? Probably not, it might, but probably not. But I would be very surprised if 2022 didn’t bring a second factory, or certainly very soon thereafter.”
The firm, which has a 250,000 sqft facility in Knaresborough, North Yorkshire, had previously slated 2019 for a second factory.
However Dave Sheridan, Ilke’s executive chairman, told Modular Monitor separately this week that Covid-19 had created a “small delay” but it is “continuously in the process of analysing potential locations”.
Ilke, which is owned by private equity group TDR Capital, kicked-off a redundancy programme last summer which at the time was blamed on “delays to existing orders and a slow market” due to the pandemic.
But Bench, who joined Ilke from Crest Nicholson in October 2019, described the company’s current pipeline as “extremely healthy”. Ilke is on target to deliver some 850 homes this year, which is around double last year’s output.
Bench added:
“There’s a whole host of transactions we’ll be announcing in the next few weeks and months with some household names.”
Last July Ilke secured a deal with Vistry, formerly known as Bovis Homes, for 32 modular homes in Bristol. It was among a string of transactions last year, which included deals with housing associations Guinness, Orbit and Stonewater. It came on top of a £100m deal with Places for People in 2019.
Bench said that demand from social housing providers remained strong as the tenures they primarily deliver were unaffected by Covid-19. “There’s a huge demand for affordable rent,” said Bench.
By contrast, he said that demand among developers who deal with predominantly market sale properties had “slowed down”.
However, Ilke has taken advantage of this by acquiring more land as part of its turnkey approach. “We've managed to make hay as the land market has slowed while values have been maintained,” said Bench.
In terms of other impacts from Covid-19, Bench said Ilke’s factory output has not been significantly affected, helped by social distancing being easier to control. “The guidelines are forever evolving, but we revisit those on almost a daily basis just to ensure that we comply. It’s infinitely more straightforward though in a facility that's 250,000 square foot,” he said.
On continuing safety concerns around the MMC market, Bench said he believed many fears were down to a lack of understanding. But he added: “I think we’ve made huge strides in the market.” He branded the £31m deal Ilke did with Man Group last year as the “acid test”.
He said: “You know how risk adverse institutional capital is. I think we’re well beyond that proof of concept stage. Household developers, housing associations, institutional funds are comfortable and chomping at the bit to do more work with us.”
On concerns raised by insurance companies with regard to MMC, previously reported by Modular Monitor, Bench said: “We're working hard on educating the larger lenders and the insurance companies to ensure that they can get their own policy in line with our product types.”
Bench also brushed off any serious impact from Brexit. He said Ilke has stockpiled “to a degree” helped by the size of its factory.
“We’ve got all the supplies we need to kick-on. And we’re very lucky that we spend an awful lot of time and effort on developing a good quality supply chain, so we are largely insulated from most disruptions,” he added.
*NEWS*
TopHat hires Airbus tech high-flyer
TopHat, the Goldman Sachs-backed offsite homes manufacturer, has appointed a new tech guru to drive a data-led approach to its housebuilding.
Matthew Evans, previously vice-president of digital transformation at aeroplane maker Airbus, has taken the newly-created role of chief technology officer at the Derbyshire-based firm.
Evans will introduce a data-led approach to boost the build quality and energy efficiency of new homes and the speed at which they are delivered, TopHat said.
Evans spent five years at Airbus and was responsible for overseeing open data platform, Skywise, designed to cut down on delays across the aviation industry.
Evans said: “By spinning a ‘digital thread’ that links every stage of the manufacturing process from design to assembly, we can make the process more repeatable and certain, create a higher-quality product, and minimise waste through the learning and efficiency that this will generate.”
Founded in early 2016, TopHat started production in 2018. It received £75m in backing from Goldman Sachs in April 2019.
*OFFCUTS*
COMPANIES: Modular specialist CoreHaus is opening its first manufacturing site. The firm, which is part owned by procurement group Fusion21 and housebuilder Homes by Carlton, has secured a 20,000 sqft unit at Jade Business Park, in Murton, County Durham. It plans to produce 1,000 modular homes a year and hire 100 extra staff.
PLANNING: Tide Construction has submitted a planning application for a 47-storey tower in Canary Wharf, which will provide around 1,000 student bedrooms. A consultation on the application is due to end on 5 February, according to Tower Hamlets Council’s website.
GLOBAL: US offsite start-up Katerra is reportedly getting an extra $200m (£146m) cash injection from Japanese investment firm Softbank. Paal Kibsgaard, who took over as chief executive of California-based Katerra last June, admitted to staff the firm had experienced “challenges and mis-steps” since launching in 2015 and had “spread itself too thin”. Softbank had already invested around $2bn (£1.46bn) in Katerra, according to the Wall Street Journal. SoftBank will now have a majority stake in the business, the WSJ reported.
*NUMBER CRUNCH: 300*
The number of modular homes that BoKlok, jointly-owned by retailer Ikea and construction giant Skanska, is expected to deliver every year for the next five years as part of a new deal with housing association Vivid.
The homes will be delivered on sites across Hampshire, Surrey, Berkshire and West Sussex.
*INSIGHT*
What lessons can the MMC sector learn from the past to help it flourish?
This is the question posed in a fascinating new guide looking at the history of modular and pre-fabricated buildings dating back to the 19th century.
For example… did you know that during the Crimean War celebrated English civil engineer Isambard Kingdom Brunel designed a pre-fabricated 1,000-bed military hospital that was built in Britain and shipped out to Turkey all in the space of 10 months?
Packed full of interesting historical detail and images, it’s well worth a look. You just need to register here
The guide was authored by architects Studio Partington for the NHBC Foundation.
*AND FINALLY…*
One last plug for Modular Monitor’s final post of last year looking at the events that shaped 2020 and the impact they may have this year.
Thanks for reading and see you next time,
James
I’m James Wilmore, a freelance journalist and editor. I cover the built environment and occasionally cycling. This is me here and here
For all enquiries, story ideas and tips, please email: james@modularmonitor.co.uk