The prefabricated construction market size is growing at an accelerated pace in Europe
The ongoing housing shortage faced in the European market is expected to aid the growth of the prefabricated construction industry over the next five years. Many prefabricated firms are expanding their manufacturing capacities and entering into strategic partnerships to tap into the growing market, according to a European prefabricated construction market report from ConsTrack360.
The United Kingdom is expected to lead the growth of the European prefabricated construction market. According to ConsTrack360’s estimates, the prefabricated construction output in the United Kingdom is expected to reach GBP 14.6 billion by 2027. Players like TopHat are expected to lead the market over the next five years in the United Kingdom. The firm is currently in the process of building one of the largest manufacturing facilities in the region, which will have the capacity to produce 4,000 homes a year.
· TopHat, in April 2023, also raised a multi-million-dollar deal to accelerate the construction of its modular factory. The firm raised a total of raised £70 million in a funding round from Persimmon and Aviva.
· In addition to fundraising deals, TopHat is also exploring potential strategic partnerships to accelerate the adoption of prefabricated construction methods across Europe. The firm, in June 2023, entered into a strategic collaboration with Nexity, one of the largest modular house builders in France.
Nexity aims to achieve a goal of manufacturing 10% of its housing production in factories by 2028. The firm delivered more than 18,000 homes last year and this partnership with TopHat will enable the firm to further accelerate the growth. The partnership is expected to reduce delivery times significantly in the French market from the short to medium-term perspective. TopHat, on the other hand, is expected to further expand its presence in more European countries over the next few quarters. The firm is experiencing strong growth in the United Kingdom and the expansion strategy will further aid the growth for TopHat over the next three to four years.
While UK-based firms are expanding their regional footprint, global players are also seen boosting their presence in the United Kingdom market. Volumetric Building Companies, the US-based modular construction provider, announced that the firm is planning to build manufacturing facilities in the United Kingdom market. The facility will enable the firm to capitalize on the growing European prefabricated construction industry. In 2022, the firm also merged with Polcom, the Polish steel modular manufacturer that specializes in the hospitality sector, to strengthen its presence in the European market.
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These activities from global modular construction developers reiterate the point that the market is poised for accelerated growth over the next five years, as discussed in the Europe prefabricated construction market report from ConsTrack360.
Notably, the growing presence of such global providers is also expected to drive the competitive landscape in the European market from the short to medium-term perspective. The competitive landscape will be also aided by domestic firms seeking to expand their presence and capitalize. Alongside TopHat, there are several other players operating in the European market. In the United Kingdom, ilke Homes also have a strong presence in the segment. In Germany, Ecoworks raised a funding round in 2022 to develop innovative products in the sector.
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Other global prefabricated construction markets are also expected to experience a high-growth period over the next five years, as indicated in the global prefabricated construction market research report by ConsTrack360. Globally, several government organizations have undertaken prefabricated construction projects to provide housing to their citizens. This includes government organizations in India, Australia, Canada, the United States, and Hong Kong, among others.
· The Queensland government in Australia has launched a pilot project aimed at addressing the housing shortage in the region. As part of this initiative, they will be delivering a total of 52 prefabricated homes with two or three bedrooms throughout the state in 2023.
To tackle the pressing issue of affordable housing shortage, Hong Kong has unveiled a significant investment of US$3.36 billion towards the advancement of prefabricated homes within the region. Under this program, Hong Kong aims to construct 30,000 units over the next five years, with a goal of reducing construction time from the current six years to four and a half years. The initiative aims to expedite the delivery of these units to the citizens and alleviate the housing crisis faced in the city.
More such programs and investments are expected to emerge in H2 2023, thereby aiding the growth of the global prefabricated construction industry from the short to medium-term perspective.
