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Offsite: The cautionary tale of mini-cabs and mobiles

Zak Garner-Purkis

“Biscuit manufacturers don’t get told to invest in flour mills” said Quintain CEO Angus Dodd, with a shrug of the shoulders.

The boss of Quintain – developer of the Wembley Park scheme – was responding to my question about whether clients should be investing in offsite construction as contractors currently lacked the capacity due to small margins.

“That’s their business – why would we invest in their business? We’re the buyer here, the industry needs to deliver it,” he told me.

“I’ll probably get shot down for it.”

On one hand, you can see Mr Dodd’s point: why should he invest in a market that currently lacks the capacity or reliability to deliver on the scale he and his business requires.

On the other hand, the potential benefits of offsite could help everyone. The time to build will decrease, quality will improve and completed buildings will be easier to maintain, which, for a build-to-rent developer, could be a gamechanger. The trouble is those benefits are still some way off.

It’s clear that offsite is the future.

But how do we get there? More specifically, who should pick up the tab for getting there? Well, that’s less clear. 

“Someone should be taking that risk and I don’t think it should be the developers; it should be contractors or the government or private equity,” Mr Dodd told me.

Last week at the CN Summit the executive editor of Wired UK Jeremy White said that the Silicon Valley viewed construction as “ripe for disruption”.

This statement can probably be viewed as a warning, because when a market is heavily disrupted it is normally at the expense of a significant demographic.

Ask owners of mini-cab firms if they appreciated being disrupted by Uber, or mobile phone manufacturers if they liked it when it happened through Apple.

In both cases most understood what the future of the market looked like, but failed to act and were cut out of the profit.

Taxi firms knew that hailing a cab using your phone was inevitable, but when Uber came in it undercut them with an army of part-time zero-hours drivers.

Phone manufacturers were in agreement that app-based internet phones were the future, but when the iPhone was adopted by the mainstream, most of them lost their market share and went to the wall.

So, those that take the plunge and invest in the promise of offsite may suffer losses now, but they might just be ensuring the survival of their business in the future.

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