Constructing units at a factory, then transporting them to the actual site of construction, is the latest trend in the construction business. Known in technical terms as offsite construction, it offers important advantages for clients/buyers and developers. A recent report that reviewed last year’s market trends by well-known real estate consultancy Jones, Lang and LaSalle (JLL), showed that while sales prices fell in Dubai, it remained more or less stable in Abu Dhabi and there was a significant decline in the number of transactions across the real estate vertical.
Now the figures, just 8,000 residential units were completed in 2015, less than half the number completed in 2014. This trend is expected to continue this year as developers are obliged to consider subdued market conditions and tightened liquidity. Now, think of the global conditions that have had a negative effect on the real estate sector – declining oil prices, fears of a Chinese recession looming large, strengthening US dollar, etc. It comes as no surprise then, that the year 2015 was not the best year for the real estate sector in the UAE, which slowed down due to lessened government spending and a quieter economic environment.
Now, look at the bright side of this. The UAE government is trying its best to attract investment in the area with smart and sustained initiatives. Developers are trying their best to buck the trend to ensure 2016 emerges as a ‘good financial year’ for the real estate by moving away to more affordable asset options. Rather than concentrating on luxury and high-end projects, builders are now moving towards the affordable housing/space segment.
In this context, offsite construction makes immense financial and business sense. Cheaper options through innovative technologies will boost the realty sector. Due to various economic hardships being faced globally, leading to reduced interest by overseas buyers in the UAE market, the lack of supply becomes a common issue. To counter this, there is a need to attract mid-level buyers with more cost-effective options which can actually re-energize the market. For developing cost-effective housing options, offsite construction is an important strategy.
For driving new mid-level projects too, developers need to use offsite construction more. Constructing units at a factory which are then easily assembled at new sites or off-site construction offers enhanced speed of construction, high-quality units as well as matches the expectations of immediate and handsome investment returns. This attracts a wider range of clients into the fold.
Offsite construction makes it possible to manufacture entire building components such as columns, beams, hollow core slabs, wall panels, staircases, windows, doors, bathroom units and facades at one place and in a controlled setting. These are then installed at the actual site.
Offsite construction follows an assembly line and automated process, and thus, ensures nearly time savings of nearly 50 percent, and cost savings of up to 30 percent. These savings happen due to reduced need for preparatory work on site, opportunities for quicker rental returns and reduced interest payments for investors.
It also eases problems regarding materials’ deliveries, construction of onsite storage and accommodation or impact on local traffic flows. Installing units assembled offsite reduces noise disturbance for neighboring residential areas and the new project construction is also less subject to the variations in weather. Variations of weather have the potential to slow down the entire development/construction process.
Thus, offsite construction is a win-win concept with benefits for all!
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