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    Blog by Simon Gawthorpe

    Our modular journey

    22 May 2019
    A 4 minute read by Simon Gawthorpe

    Last week we were delighted to announce a £90m deal with Sekisui House and Homes England.

    It’s a deal which will create much needed new homes, new jobs, and marks an exciting period of opportunity as we tap into international expertise which will potentially revolutionise the UK’s approach to modular construction.

    Working in partnership

    While hallmark Urban Splash restorations and conversions remain close to our hearts, the deal has taken our business in an exciting new direction, making us the modular partner of choice for landowners in the public and private sectors.

    This move certainly feels like the next natural step for Urban Splash; ever since we were founded 25 years ago, we’ve pioneered the imaginative, and unconventional. We’ve created 5,000 homes and 2m sq ft of workspace across the country, investing more than £1bn in regeneration projects from Plymouth to North Shields, using different techniques, materials and collaborating with a multitude of trailblazing architects and partners.

    Town House

    In 2012, we went a little further, kickstarting our current journey into modular and working with Liverpool-based shedkm to create a prototype modular House. We found an offsite partner to build the concept – SIG Plc, or Insulshell as it was back then – and we soon had a two storey, factory-created home standing on our site at New Islington in Manchester.

    Modular construction

    By 2016 (after much effort, R&D and refining) we were ready to launch the product to the market, offering buyers a completely customisable home. We offered two options; a 2-storey 1000 sq ft model and a 3-storey 1500-sq ft model with layouts determined by each customer, who would be able to create their own ‘Grand Designs” without the hefty price tag.

    There were of course learning curves in the early days – getting through the original R&D process and delivering a product which was well-designed, yet attainable and sustainable. There were challenges brought on by external factors too – helping our first customers secure mortgages on a product as yet untried on the market for example. We took each opportunity to learn, capitalised on it, and continued to improve our product and our delivery of it.

    By the end of 2016 though, the appetite for modular was real, and the gap in the market for beautifully designed, flexible homes more so. All 43 of those first Houses at New Islington had sold out and were fully occupied – great news. Values started to increase too for the early adopter homeowners. So we pushed on...

    Town House, Smith's Dock

    By the following year, that meant launching our second and third modular sites at Smith’s Dock in North Shields and Irwell Riverside in Salford. With more R&D learnings, and new factory efficiencies, these too sold out and are now fully occupied.

    During 2017, the narrative only strengthened; spectators on the periphery joined the dialogue; tangible examples of new, beautiful, design led homes – like our three developments above – were not only a reality, but a reality adopted by homeowners who’d clambered to get them. As a residential sector, we now had clear case studies of MMC in practice – which helped secure the attentions of the Government and more potential partners.

    Big commentators in the space – pioneers such as Mark Farmer – called for radical changes in an industry so reliant on traditional construction methods and stale product stock. People looked to international examples and processes in the car manufacturing industry to gain inspiration on more efficient methods. Vertical integration was the big recommendation and many in the housing industry – spurred on particularly by the collapse of Carillion and impact on traditional construction that followed – believed that by an ownership of the supply chain would make for more effective operations and control quality.

    Around this time, we were doing a deal to make this happen for Urban Splash and, in March 2018, we formally completed our acquisition of the SIG modular factory – taking complete control of our supply chain and grasping a stronger handle on the creation of our modular homes; thus giving us the ability to reject traditional contracting barriers and truly understand the detail of our homes and how they were manufactured. We now had the capacity to create hundreds of them each year.

    Throughout 2018, that helped us launch a fourth modular scheme, Port Loop in Birmingham, and helped us secure the belief of other major partners and landowners who, during the course of last year, appointed us to deliver modular homes in large-scale developments including Campbell Park Northside in Milton Keynes – which we are working on with our longstanding partners Places for People Wirral Waters in Merseyside – a JV with Peel which will deliver around 340 modular homes – and more homes to Smiths Dock in North Shields – again a JV with Places for People.

    Mansion House, New Islington

    The deal with Sekisui House is two years in the making, but getting it over the line this week means that we are able to deliver all of the above and more. The investment from Sekisui House is not just financial, they will also be vertically integrating their expertise into our organisation. Their approach to innovation is impressive – believe me I sat in their earthquake simulator in a house in their R&D institute in Japan (which was scary and impressive!).

    But now, the real work starts. The Urban Splash culture is a thirst for learning, and a passion to improve our designs, our homes and places. However, the unique set of partners we’ve now assembled allows us to deliver on this long term vision. We appreciate however that we can’t do it on our own and need land, great suppliers and even more passionate people in our team. We can now plan for the long term, looking to work with our new partners to release a full product range of beautifully designed, flexible homes, at affordable prices, produced by a market leading manufacturing facility, delivering much needed housing across the UK.

    By coincidence, on the day our deal completed, Japan coronated its new Emperor Naruhito. His reign will be called the Reiwa era – which when translated into English means ‘beautiful harmony’. What better sentiment for our new relationship – and of course this new beginning for the UK housing market.

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