Cost model
                            Modular 
                            construction
                            An edited version of this article first 
                            appeared in Building magazine in April 2017
         Contents 
         1.  Background      04
         2.  Modular construction     05
         3.  Design      07
         4.  Procurement and construction            08
         5.  Cost influencers                        10
         6.  Sustainability     11
         7.  The cost model     15
         All images:
         Ladywell, Lewisham Council (Rogers Stirk 
         Harbour + Partners)
          Debates about modular construction and                               Rob Mills
                                                                               Director, Program Cost 
                                                                               Consultancy, Commercial
          off-site manufacture are nothing new. But                            rob.mills@aecom.com
          with more suppliers, better quality and 
          greater awareness within the industry, 
          could it finally achieve critical mass? 
          Rob Mills of AECOM looks at the figures.
           Acknowledgments
           The author would like to thank Barry Nugent, 
           James Barton and Garry Burdett of AECOM for 
           their help in preparing this article.
                                                                                     AECOM  |  Cost model  |  Modular construction  |  April 2017  |  4
             01                                        It may have had different names over     Yet this was an opportunity missed. 
                                                       the years — prefabrication, modular      A relatively small number of houses 
             Background                                building, design for manufacture and     were delivered in that post-war push. 
                                                       assembly, or off-site construction       Technological innovations were not 
                                                       — but the idea of constructing           adopted, and so there was little change 
                                                       buildings away from the site where       to the development of the industry.
                                                       they will eventually stand has had a 
                                                       long history, dating as far back as the  Living the high-rise
                                                       16th century.                            Throughout the 1950s and early 1960s, 
                                                       The postwar push                         demand for housing was a result of 
                                                                                                major slum clearances in inner cities. 
                                                       Perhaps the most notable use of          This set a precedent for government 
                                                       modular construction was during the      housing targets and saw the 
                                                       UK’s post-war transitional period,       introduction of a large-panel residential 
                                                       which drove the need for homes           systems on high-rise blocks, based 
                                                       and accelerated the search for a         on their successful application 
                                                       remedy to meet the country’s housing     in Scandinavia.
                                                       supply issues. The legacy of that 
                                                                                                The first use of such systems was 
                                                       building programme survives today, 
                                                                                                a nine-block residential scheme 
                                                       with many of those postwar homes         commissioned by the London 
                                                       still standing.
                                                                                                Borough of Newham using the Larsen-
                                                       In that period, redundant arms           Nielsen system. The subsequent 
                                                       factories were adapted to allow ex-      progressive collapse of the structure in 
                                                       servicemen and women to produce          the Ronan Point block led to concerns 
                                                       prefabricated housing in controlled      around durability and structural 
                                                       factory conditions. This addressed the   performance. This only added to 
                                                       pre-existing housing supply problems     existing negative views of methods of 
                                                       and targeted employment issues — an      prefabricated construction. 
                                                       idea that would surely resonate today.
             The most notable use of 
             modular construction was 
             during the UK’s post-war 
             transitional period.