Australia: Corrs High Vis: Episode 6 – Penchant for prefab: A viable alternative to traditional building

New construction technologies are transforming the way buildings are going up around the world and prefab and modular building, in particular, are gravitating towards the mainstream of construction in Australia. In our latest podcast, Corrs Senior Associate Leighton Moon talks to Bill McCorkell of Archiblox about the shift, the benefits it brings and the future landscape. Corrs High Vis tackles the issues that matter in the construction industry. The podcast series, brought to you by Corrs Construction team, offers analysis and insights to help you make smarter decisions.

These podcasts do not provide legal or other advice. Obtain legal or other professional advice as required.

TEXT VERSION

David Hastie: Commentator

Leighton Moon: Corrs Chambers Westgarth – Construction - Senior Associate

Bill McCorkell: Archiblocks

LEIGHTON: Hello and welcome to Corrs High Vis – Corrs Chambers Westgarth's Construction podcast. I am Senior Associate Leighton Moon.

Prefabrication and modular building is now one of Australia's fastest growing sectors in building and construction. In March we saw the Australian construction industry forum announce that pre-fabAus was its latest member. We are lucky today to have one of the directors of pre-fabAus and also a director of Archiblocks, Bill McCorkell to shine some light on the pre-fab and modular industry. Welcome Bill.

BILL: Thanks for the opportunity.

LEIGHTON: Do you still find there is some resistance in the market to modular building. I know when I first started negotiating deals that owners and financiers were a little bit worried because it was new technology and there was also perhaps because of its early days as low end build a perception that it wasn't the high quality that some owners require. Is that still an issue in the market?

BILL: It is. We found that in the early years the early adopters that came on to it into the business really looked at Archiblocks as a new trend, new technology, a new form of procurement, and they were more interested, and more tech savvy, obviously with the architectural merits that we had in the business they were design orientated as well and all the sustainability credentials that we had and have that attracted a certain type of people. That's definitely shifting the perception I think, with pre-fabrication and modular building and architecture has shifted in the last couple years. It's become a lot more mainstream. It is becoming more mainstream as people seek alternatives to current housing procurement.

LEIGHTON: So the module is manufactured off-site, it then comes on to the site and is installed. Now I understand it is between you and your client, you will take the risk of that installation, but is that something that you subcontract out, or is that something you do internally?

BILL: So we have a number of the installers on site – are Archiblocks employees and again that's lessons learnt and also dividing of cost. The more that we can control with our own overheads and costs then the less we are having to pay other people to have, to pick up. But we do with specialty firms to assist in the actual installation because there is a fair high level of expertise when you are dropping into near millimetres of space to drop into and not only that it's the transport of the building from the facility to site is super important. So it's about the minimisation of any damage in the transport is super important. One thing we keep in mind consistently is the quicker we are out of the build site the more cost effective for us it is. So we want to really, really, really, we really really work on minimisation of the site on time and that's why we have chosen to use the volumetric form of pre-fabrication within the industry because it allows us to do all the fixtures, all fittings, all the finishes, within the facility. So by the time we get to site we install the building, technically we do six modules in a day. A module might be anywhere from 3 to 5½ metres in width in Victoria, only as wide as 5 metres in New South Wales, anywhere from 16 to 18 metres in length and 4 metres in height. So the quicker we are in the quicker we are out, the better is for the business, the better it is for the client, the better it is for our program, the better it is for the quality of the product. We find that there is a lot of fairly compelling reasons to stick with the volumetric form. There is other opportunities for panelised systems coming into play in Australia that we are very observant of and again we will take from the industry part a view to not be innovating consistently not being aware of what other people are doing in the market place. But again the panelised form of manufacturing and pre-fabrication still require a level fit-off on site. Again there is still site time that needs to abided to and again I circle back to that idea – the quicker we are in, the quicker we are out of site, the more cost effective it is for us and our clients.

LEIGHTON: So as far as risk in the transport that is something that you would take up until it is delivered on site and to the crane and it would then go to the installer?

BILL: No we cover off. Well the installer ...

LEIGHTON: That's between you and the installer?

BILL: Yes spot on. So the installer does cover the costs from the facility so as soon as it exits from the facility to the site the insurance is covered by the installer and also to drop in the buildings onto site. So as soon as they're placed then it comes back to cover at us.

LEIGHTON: As far as the smarts and the intellectual property in the process there's obviously some smarts in the design and the manufacture but the installation itself would have a lot of build in the smarts that you provide to be installed. Is that something that you need to be conscious of to protect?

BILL: Yes so we work collaboratively with the installer to ensure that we've both on song, on page with that. A really good example of that is five years ago we were using up to 450 tonne cranes to lift our modules in, these days we are using 220 tonne cranes and as little as 120 tonne cranes. So the cost difference from one to the other is quite significant and the benefit that the clients get as a result is quite significant.

LEIGHTON: As far as access issues to the site – because the modules are as you've just said very large things – and we're aware of one building site in the CBD for example where the program was blown out because they didn't appreciate the permit issues and road closure issues of inner city building that need to be taken into account. What are the challenges for a modular building site access that isn't there for a traditional build?

BILL: One in Melbourne in particular there is the tramways and third lines. The second one would be the access through various streets leading up into the actual site, the site itself mightn't have had very easy access. The access to the area can be difficult. We do a number of projects up in Sydney and you look at the beachside suburbs like Coogee and Bronte, some of the areas look like they're fantastic to lift from but actually gaining access to those areas is near impossible. So then you start considering well what are the sizes of the modules and you might just decrease the size of the modules to gain access to that and obviously that has a knock-on effect of costs because you've having to redesign chassis and redesign procurement and rethink about the building different details that go into the manufacturing. So there's obviously ongoing costs or are costs with the difficulty of each site.

LEIGHTON: It sounds like the access issues as an example is where right at the very beginning of the design stage you need to be considering site issues more so than a traditional build?

BILL: 100%. So we do that in schematic design. From the very get-go we have our transport affiliated company go through and do a route logistics check and that forms part of our checklist prior to us even entering into any DA or town planning requirement, so very early on in the process.

LEIGHTON: As are as the construction on site itself I thought it might be useful for the listeners to hear a breakdown of the amount of time you spend in the yard, the amount of time you spend installing, the amount of time you spend I suppose commissioning onsite compared to a traditional build.

BILL: From the get-go of contract signing we typically take a four week process for procurement – all by different kit of parts. So by the time the first chassis rolls into the facility within three to four weeks we typically would have a typical building to lock up and that's given the fact that we have various other manufacturers involved in the chain and so we will by adjusting time processes there'd be the ability of getting to lock up and installed in a quick period of time. Typically we spend 12 to 14 weeks for a full build process in the facility. The installation typically takes one day and the fit-off depending on the amount of site works typically takes a further two weeks.

LEIGHTON: Before we started on air you were discussing that the majority of your labour is actually in your yard rather than on site and that that's had some positive OH&S effects through repetition and familiarity.

BILL: Yes and it's also observance. Given the idea that we do have a lot of eyes in the facility and people are more prone to be smarter of the way they do things and more proactive with the works that they perform and also through repetition. Through repetition obviously laziness can creep in, so we've very aware of that as well. OH&S is something that we're very very fundamentally keen in maintaining within Archiblocks. We have external audits that come in regularly to assess how we're going and there's a constant cycle of improvement within the business and it's one of our big milestones in KPIs for our managers out in the facility to maintain.

LEIGHTON: What do you foresee the challenges and developments for modular building to be in the short to midterm?

BILL: The challenges in the short term is just more observing what is happening in the broader industry. Prefabrication within Australia is still taking up only a small percent of the overall construction volume. Typically in international areas and industries it's a lot higher but there's varying reasons why. Say for in northern Europe it makes a lot of sense to do a lot of manufacturing indoors when you've got inclement weather for a majority of the year. Within Australia it's a small percentage of the overall marketplace that is growing but it's more being aware of the different technologies that are emerging such as the panelised form of prefabrication. In the long term who knows. We're keen innovators in our business and we've always got our eyes on the ground as to what's happening internally as well as nationally. With 3D printing there's houses being constructed in Europe and also throughout Asia with 3D printing. I believe that's still more of a fad than anything else that it's more of interest. I believe that there's still a number of years off before that will become a commercial reality but it's definitely an exciting trajectory that could occur with 3D printing. But there's always other smarts within the industry that we look at locally and that comes down to the way we do our processes, how lean we can be in the business and all of our systems that are involved with our form of manufacturing.

LEIGHTON: In the future what benefits do you think the modular approach will have for the broader social issues that we discussed earlier on?

BILL: Just from a healthy homes environment the more volume that we get through at Archiblocks the more opportunity we have to really be decisive in the type of materials embodied energies and the lifecycles of all the materials of the products that we actually make. So one of the things at Archiblocks we design really nice things, we procure well, we manufacture smart but we also have the ability of creating really beautiful sustainable places and that's what we see as a part of the future of manufacturing that it gives us the opportunity to really minimise waste and maximise comfort for the future occupants.

LEIGHTON: Well Bill thank you for your time and to our listeners we'll wrap it up there and we hope you join us again for the next episode of Corrs High Vis. Until then goodbye. And of course this podcast is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. You should always obtain legal advice about your specific circumstances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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