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How modular construction supports advances in technology

How modular construction supports advances in technology

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Technology is central to the ability of the modular construction industry to deliver on numerous fronts when producing new residential and commercial buildings. In this latest article we discuss how modular construction and technological development go hand-in-hand.

When many of us consider modular construction, we focus on details such as speed, cost-effectiveness and sustainability. While all of these elements are relevant and important with regards to the development and greater use of modular construction techniques, they are only possible with the use of powerful technology.

This, of course, ties in well with the current year of construction technology, as recently announced by India’s Prime Mister Narendra Modi. It’s no secret the global construction industry has been slow to adopt and adapt to technology. However, modular construction techniques rely on technology and supports the use of and further advances of technology within the sector.

The technology behind prefabrication

Whilst the use of technology in the modular construction process is clearly portrayed, it may not be completely obvious just how central it is. The basis of volumetric modular systems, or prefabricated construction, is the initial digital 3D design and the ability to utilise Building Information Modelling (BIM) to ensure the building is suitable for the planned location and design requirements. It’s also behind the stackable modules used in several storey homes or larger industrial buildings, including hotels and office blocks.

But the use of technology within the industry goes much further than that.

Measurements and sizes are exact thanks to the software used to cut and move the different pieces of each module. Emerging construction technologies, including robotics, 3D imaging and even the use of drones are becoming increasingly leveraged to aid the design and development of modular construction. Those technological capabilities are enhanced, speeded up and become more cost-effective and sustainable, when utilised in a controlled, factory setting.

This is why together and powered by the right technology, modular construction projects can be completed some 30% more quickly than traditional builds. Indeed, recent news highlights that a new hotel in Folsom, California, opened a full five months early after the building – constructed with the use of modular techniques – was completed months sooner than it would have done, had traditional, on-site only methods, been employed.

Less waste by design

The technology used by modular building businesses also makes it possible to deliver projects while creating less waste. That’s due to the precision achieved through the software and in-factory construction process. Being able to effectively utilise set amounts of the different required materials across the different modules of a building, means waste is reduced to a minimum.

Not only does this support the lower-cost of prefabricated buildings, it’s also promotes less waste and a lower carbon footprint. Both of those details are attractive to:

  • Investors in the industry.
  • Construction tech designers.
  • End-buyers of the building, due to the quicker delivery and potentially lower comparative cost.
  • Governments working to end housing crises and provide homes for all.

It’s important to point out that, as yet, not all modular construction business make the best possible use of the available technology to produce projects that deliver on every element we’ve outlined, from the speed, to cost to the support of technology. One business that does, is Modulex.

Modulex has been created to help deliver the homes and buildings required right now across India. With input from a UK-based management team, Modulex delivers buildings with:

  • A short build time, with up to 90% of construction completed off-site.
  • Fixed cost and time guarantees.
  • Some 30% cheaper to maintain than traditionally built projects.
  • Earthquake proof.
  • Built to British standards.
  • Fully mortgageable.

Modulex has been created to deliver the eco-friendly, cost-effective, safe and long-lasting and quickly constructed homes and businesses that India still requires. We’re proud of our business and know it will produce, not only much-needed buildings, but a welcome profit for its investors.

 

 

Red Ribbon CEO, Suchit Punnose said:

Modular construction continues to develop and expand within India and on a global scale. The right technology is essential to the success of businesses like Modulex, which is why we’ve invested in the right software and systems that will power a successful modular construction business.

A lot is being asked on the construction industry right now and we created Modulex with that in mind. It delivers on every detail that’s important to India, the population, the government and investors.

How to benefit from India’s construction boom

How to benefit from India’s construction boom

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India’s construction needs are no secret, nor are the forecasts for impressive growth across the country’s construction industry. When investing in India it makes sense to capitalise on growth markets within the country. Right now, there options for businesses and investors both, to become a part of a construction industry that’s set to be the third largest in the world, just a few years from now.

With India’s general election on the way, Prime Minister Narendra Modi and his government are working hard to re-iterate their promise on housing and infrastructure development across the country. Even if the ambitious targets aren’t quite met, achieving a high percentage of them still requires a significant amount of investment and construction. That’s something that appeals to many investors and companies who wish to grab their part of the potential activity, business and return on investment that’s available.

Looking at the potential for India’s construction sector, according to KPMG, India’s construction sector will be third largest in the world by 2025, behind only China and the US, with a valuation over $1 trillion.

Meanwhile, international construction consultancy Mace Group, estimates that by 2050, India’s urban population will be around 814 million, almost double the 449 million people living in urbanised areas today.

Doing business in India

These forecasts all stem from India’s huge construction, urbanisation, smart city and industrial corridor plans. With so much construction required to achieve even part of those targets, India has also made changes to make it easier for foreign-owned businesses to work and operate in the country.

According to World Bank rankings, India has climbed up its ease of doing business rankings, to 77th, from 100th and 133rd, prior to that. Of course, improvements could still be made, but its certainly moving in the right direction.

Improvements include:

  • Tougher and more standardised regulatory oversight.
  • New foreign direct investment rules that overseas investors can own 100% of an Indian-based business.
  • A clearer tax code.

But, its not all plain sailing, particularly for businesses with no links to, or knowledge of the way business works in India. That remains the case for the construction sector, despite the huge building needs across the sub-continent.

With the potential for growth and profits as high as the country’s needs for every kind of construction specialist, many small Indian businesses, including startups, are working towards securing their own piece of the investment returns that are available.

That means winning those contracts and operating in a way that will secure a future across India, won’t be easy – if you go it alone.

Collaboration and investment

One way for foreign-owned businesses and investors to become part of the construction boom and benefit from the huge government and private investment across the country, is through collaboration with existing Indian-based companies.

Of course, forming a relationship and building enough trust to encourage both parties to make a significant investment and work together, doesn’t come easy. But the end rewards will certainly make the effort of doing this correctly, worthwhile.

If that doesn’t appeal, there is another option: to invest in an existing construction-sector related business. One that has all the connections and capabilities in place to expand in response to the ongoing needs of India’s planned construction and infrastructure projects.

One that not only has a management team experienced in doing business in India and the UK, but has also been created with sustainability at its core.

Modulex is one such prospect. Construction of the first Modulex factory is already underway and set for completion in December 2019.

Providing a modular construction facility in Indapure, Pune District, 250 Kms from Mumbai, Modulex will have an annual capacity to create 200,000 square metres of steel commercial and residential buildings, off-site. And that’s just the beginning.

Demand for modular construction in India is growing and Modulex will become an intrinsic part of fulfilling the demand for every type of building, to support India’s ongoing urbanisation. Why? Because modular construction provides a cost and time-effective answer to India’s huge construction needs.

Modulex can help India achieve its goal of housing for all and the creation of modernising existing cities, while also building new ones. What’s more, it can do so in a sustainable way that doesn’t diminish the natural capital of the country.

Red Ribbon CEO, Suchit Punnose said:

India’s construction goals are no secret and the forecasts for growth across the industry in the next 5 – 15 years are of real interest to investors and business around the world. Doing business in India is easier than its ever been, but for the uninitiated, challenges remain.

Investing in Modulex is something that brings many benefits beyond the potential for a strong return on investment. Modulex is managed by experienced asset managers, with expert knowledge of India and the UK investment and business markets.

Its sustainable and scalable and has been developed to remain a feature of India’s construction industry now, at its hour of need and also well beyond.

Government continues to support technological innovation in construction

Government continues to support technological innovation in construction

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The Government continues to strive to achieve its target to house every inhabitant of India by 2022. A new initiative to encourage technological innovation in the construction sector was launched earlier this year and modular construction could benefit from this new push to solve India’s domestic construction needs and also, lift the country’s reputation in the industry.

Ever since Narendra Modi’s Government announced plans to house every inhabitant of India and build millions of new, affordable homes across the country by 2022, there has been a real push to approve and build those properties. As in most countries around the world where more housing is required, a combination of construction techniques are being employed to create an adequate amount of housing.

In recognition of the sheer size of the challenge, some Governments, including India’s, are increasingly supportive of new technologies that can impact on the delivery of those homes:

  • Faster.
  • In a cost-effective manner.
  • With eco-friendly techniques.
  • In a way that can also provide a long-term boost to the economy.

India’s latest push to encourage more technology and efficiency in construction, is the Global Housing Technology Challenge. The idea is to instil new and innovative ideas that can be used to propel India’s construction industry forward, both in the short-term to help achieve its domestic construction targets and in the long-term as an industry on a global scale.

How technology can improve construction methods

Technology is something that now plays a part in most industries, that for many years relied on traditional methods, systems and processes. However, the construction industry is one that has lagged behind in the development and encouragement of change and innovations.

However, there remains a real and still growing need for homes across many countries, not just India. New innovations are urgently required from builders and construction companies. Without that, they will struggle to deliver cost-effective, quickly built but still safe and longstanding, residential and commercial buildings.

Among the construction technology, or ConTech, techniques that could support India’s construction needs are:

  • Drones – which can be used to improve precision and accuracy on building sites.
  • Construction software platforms – supporting real-time collaboration on construction developments of all types and sizes.
  • Robotics – something that can be utilised both in traditional and modular construction sites and factories.
  • Modular construction – where materials and time can be used more effectively, lowering costs and construction time and creating more energy efficient projects.

This represents just a handful of the types of technology and innovation that could become widespread across India’s construction industry, in a matter of just a few years. What’s more, the prefabricated construction industry has already been slowly gaining support in India for some time, making now the perfect time to develop it more vigorously.

Modular construction in India

The modular construction industry is already growing across India and being utilised in different ways. Of course, where housing construction increases, so do thoughts towards luxury homes and higher profit margins.

While there’s no doubt that prefabricated homes can produce unique and beautiful homes – for a price – the industry is also perfectly placed to provide the low-cost, quickly built properties that India so desperately needs.

By encouraging fresh technological innovations to support India’s construction needs, its likely PM Modi is attempting to ensure that the momentum in the low-cost homes market isn’t lost. The timing is poignant, given the March 2019 construction targets don’t appear to have been met. Indeed, it could be considered an inventive ploy to help drive India’s construction industry to become one that gains global recognition.

That’s something that could have a lasting, positive effect on the country’s economy, while also delivering the required homes and buildings across India, right now.

Suchit Punnose, CEO of Red Ribbon said:

The modular construction industry is one that answers many of the requirements of India’s housing needs, including the desire for sustainability and economic benefit, not to mention speed and cost-effectiveness. That why we identified Modulex as the right investment opportunity for us and our clients.

Modulex is India’s first steel modular building factory, which delivers on all three pillars of sustainability – Planet, People and Profit. Modulex is perfectly poised to help answer India’s construction needs and is already an innovative solution within the industry.

Red Ribbon is proud to support the growth of innovative, modular construction across India. Not only because it can be a part of a broader construction solution, it can help deliver a reputation for innovative industry developments and a sustainable economic growth.

Why modular construction is the perfect fit for every want and need

Why modular construction is the perfect fit for every want and need

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Modular construction has been growing in popularity among investors and governments in recent years. The reason? Because without it, the ability to create the housing and other buildings that are required, will be greatly diminished and delayed. This week we discuss just why prefabricated building methods can help countries deliver on their construction development needs.

Why modular construction is the answer to many construction-related requirements

Modular construction is an industry that, up until recently, had been gaining support, interest and investment, relatively slowly. Now, however, the outlook for prefabricated, off-site building construction is booming, from every angle that could be considered.

Of course, we’ve discussed previously that while much modernisation and technical development has greatly altered prefabricated construction techniques, the broader idea of modular construction, isn’t a particularly new one. That begs the question, just why has it become so popular?

An additional, perhaps even more pertinent question that many potential investors into the industry might ask, is why is it the right option for India’s specific needs?

The popularisation of modular construction

As the global population climbs, a lack of investment in the construction sector; both from a technical and modernisation perspective and simple delivery basis, mean that right now, in a number of countries, there is a huge shortage of residential housing.

Even in countries and regions where home building has a rich heritage, its proving impossible to construct the amount of homes that are required for the number of residents who need them. Indeed, while existing populations are struggling to find suitable accommodation, current rates of building are set to create a more pronounced future shortage, too.

That’s not to say that traditional home building techniques aren’t fit for purpose. Far from it! New techniques, eco-friendly developments and making the most of a location are all elements of typical, on-site building techniques that are worth the wait.

However, there are also a growing number of situations where inhabitants can’t wait much longer for a suitable home to live in. It’s here where modular, off-site construction has a lot to offer.

Prefabricated construction methods can provide:

  • Cost-effective building.
  • More timely construction timetables, including fewer weather-dependent delays.
  • Better adherence to quality control measures.
  • Delivery of large developments quickly.
  • Easier modification of elements of homes to satisfy specific and changing, local requirements.

The level of skilled construction labour required to construct a modular home, from start to finish, is lower than that of a typical, on-site build. In addition, any delays related to the materials being used for the home, would typically be discovered early on in the process, allowing time for an alternative to be sourced, without bringing the project to a grinding halt.

All of these details, plus many more, work to ensure modular construction is an investment worth making, as returns can only benefit from more timely delivery of the finished product, along with the lower costs associated with the required labour.

India and modular construction

When it comes to modular construction and India’s specific needs, there are additional reasons, to those listed above, that make it a perfect fit. Among them are that it will help drive up construction standards more quickly and in a way that can be easily understood, measured and confirmed.

Given the huge number of homes and other buildings that are required to support, not only the fast-growing urbanisation of the city regions, but also the need for an improved standard of living in rural areas, a construction system that can build trust that building standards are in place and being adhered to, will always be welcome. That’s true, not only for those who will live and work in the properties, but also for:

  • The Government.
  • Modular construction firms.
  • Investors.
  • Construction professionals, of all levels.

Prefabricated construction methods can also make it easier to alter a design and make it more suitable for the very different areas across India. Where small, quick to build homes are required, once a design is created it can be manipulated, as required, reliably and easily.

For those larger homes or buildings, the same is also true. The initial design can be changed as required, with all safety details in place, in accordance to the available land plot and other relevant details.

In addition, let’s not forget the sheer amount of homes and buildings still required across India. No one method is equipped to provide that in a timely manner. Only by utilising all methods, including the modern, modular construction process that’s now available in India and much of the world, can countries hope to home their mainly growing populations.

 

Suchit Punnose, CEO of Red Ribbon said:

Modular construction is an industry that expected to grow by some 75% to around $181 billion by 2026, from its 2018 valuation. To achieve that rate of expansion, it’s clear there’s a real appetite for the industry, on a countrywide Government level and on a business and investment one, too.

The need for housing and commercial buildings that will be safe to use and also suitable for each specific requirement is something that can only be achieved with a combination of modular and traditional construction.

At Red Ribbon we’re proud to support the development of the modular construction sector across India. We know with absolute certainty that our investment in this area will reap benefits for shareholders, India’s Government and population, alike, today and in the years to come.

Modular Construction

Saving Time, Money and the Environment through Modular Construction

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Saving Time, Money and the Environment through Modular Construction

Modular construction methods are often hailed as a more cost-effective option, but that’s far from the only benefit pre-fabricated buildings can have. We take you through how modular construction firms can save on time, the environment and money, while also delivering a return on investment many would be happy to receive.

It’s no secret that global real-estate related costs are rising. The value of property is broadly on the up. Meanwhile, the cost of materials is also climbing, while skilled construction professionals are becoming more scarce, pushing their value up, too. But there is a solution to this problem: modular construction.

Just like many other countries, across India, many people still have a dream of owning their own home. However, with more people moving into urban areas of the country from the rural regions, that’s not always an easy achievement, even for those with stable, well-paid jobs. Indeed, research suggests some 110 million additional housing units will be required by 2022. That’s a tall order and once that is simply unachievable through traditional construction methods alone.

However, major advances in modular construction techniques mean homes can be built quickly, in an environmentally friendly way, while also proving a more cost-effective option.

Saving you time and money

Much scepticism remains over how reliable and practical modular construction techniques are. Although, there are signs the opinion of the sector is improving as more businesses opt for it over traditional building methods.

One major factor that’s encouraging more businesses and home-buyers to choose a modular property is time. Once you gain permission, finalise plans and pay deposits, the fabrication of a modular building is much quicker than one constructed on site, in a more traditional manner.

That’s because templates and machinery in an established and regulated factory can create the specified shell of your building quickly and to approved safety standards.

Once those elements of the building, be it a home, a commercial office or even a hotel, are created, it’s then checked and verified through a reliable, tech-based system. This ensures all the required parts are there, of the right size and structure and are ready to be transported to the previously prepared building site.

This is where the costs savings come into play. Where a traditionally built property can require up to hundreds of on-site construction professionals to build up walls, ensure measurements are perfect and all the materials are as they should be, a pre-fabricated construction team is typically much smaller. That smaller team will also need much less time on site to construct the unit and ensure its safely in situ as planned, ready for the next step.

Again, with so much of the required works already done, the modular building requires only a little additional work on site, before the owner can get to work on the inside and make it habitable.

This means that while the cost of the materials used to construct a modular building aren’t particularly cheaper than for any other property, costs are saved through the shorter period of time skilled construction professionals are required on site. Meanwhile, the requirement of fewer construction professionals is also a financial benefit.

Environmental benefits

We then move onto the environmental benefits of the modular construction sector. First of all, the question of sustainability is one the massive global construction sector is increasingly being asked to answer:

  • Are the chosen materials sustainable, eco-friendly and long-lasting?
  • Can the pre-fab factories use sustainable energy sources?
  • Are the pre-fab factories sustainable and energy efficient?
  • Can they construct increasingly eco-friendly modular homes off-site?    

These are just a few details that require a positive answer from those modular construction companies who are beginning to gain support, momentum and business across India.

Modulex Modular Buildings PLC is one modular construction firm that can answer in the affirmative to the above questions and many more. It’s the world’s largest and India’s first, steel modular building factory.

Like all Red Ribbon investment projects, Modulex was created with three essential pillars of sustainability in mind:  Planet, People and Profit.

At a time when we need to find more economical ways of providing everything the huge population of India needs, in a way that protects their environment, while also delivering on profit to the investors who support those businesses, Modulex delivers on all three and is well-placed to do so for many years to come.

Red Ribbon CEO, Suchit Punnose said:

India’s Modular Construction market is expected to be worth close to $130 billion by 2023 and at Red Ribbon we think its imperative that as much of the growing industry as possible, is created with sustainability in mind, from the outset.

Providing the answers to India’s housing and construction needs is one thing, but doing it in a way that future generations can benefit from it on multiple levels, is something every investor in the industry should aspire to. That’s why we support Modulex and strive to ensure its green credentials can match its productivity and investor returns.

Modular Construction Housing Needs - Red Ribbon Asset Management Plc

Modular Construction: The Answer to Housing Needs

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Modular construction is the answer to housing needs

Modular construction is an option for building homes that’s been available for over a century. Its popularity has ebbed and flowed with various significant events and global developments. However, one thing that remains clear about the system of preparing a property in a factory and then constructing that same building on site, in a matter of a few days or even just hours, is that it’s one that builders and policy makers return to whenever a new crisis or real need for homes arises.

Modular homes quickly gained in popularity in the US when they were developed and then sold by Sears at the end of the 19th century. That was fuelled by increasing wealth and an abundance of land to live and build on. The Great depression which began in 1929 soon put paid to the growth of buy and build your own home. And by 1932, Sears’ modular construction home sales were down by 40%. That was enough for them to put an end to that particular part of the business.

World War II ends

However, it wasn’t so very long from then, until the end of World War II in 1945 when soldiers and Governments could fully take in the sheer size of decimation across the UK and Europe, following years of fighting, destruction and bombing.
Add to that the returning soldiers needing homes to live in with their families and it was clear new homes needed to be built. Quickly. Pre-fabrication proved popular once again, with several areas in the UK benefitting from this fast and economical construction method.
However, once things began to settle, the workforce was back in balance and skilled builders were willing and able to work and modular construction, fell out of favour once more.

Confluence of developments

Fast forward to 2019 and there are a broad array of developments that have combined to once again push modular construction to the forefront of residential home building, but this time on a global scale:

  • The UK’s housing crisis where a lack of building during the credit crisis means there aren’t enough homes for the still growing population – the Government is supporting modular construction options to quickly build suitable housing for Britons across the country.
  • Geo-political unrest and refugees moving from place-to-place with nowhere to live – the RICS recently awarded a young home designer its top prize for his low-cost bamboo home that takes just 4 hours to build, to help with the slum crisis in the Philippines.
  • Economic prosperity and demand for homes and commercial properties in rural and city regions – India’s economy is among the fastest growing in the world and the changing needs of the country for less rural workers, to more city-based jobs, means more urban homes are required, quickly.
  • More and more people have developed an eco-conscience, either through their own nature or the growing number of ecological changes and concerns the global population is faced with – home-buyers and developers around the word are actively seeking green homes that are built with sustainable materials and are also powered that way, too.

Together, these separate crises and changes have led to greater demand for modular homes from a wide variety of consumers and policy makers. Meanwhile, that demand combined with a larger business desire to consider sustainability and green options, has encouraged further investment in the sector, too.

Modulex Construction is the World’s largest and India’s first Steel Modular Building Company, setting out to meet the challenges posed by India’s urban housing shortages in a practical and dynamic manner. The company is at the heart of a project established by Red Ribbon to harness the potential of India’s markets and delivering opportunities for investors. Because, when it comes to investing on the subcontinent, nobody knows India and its markets better than Red Ribbon.

Red Ribbon CEO, Suchit Punnose said:

When we think about how modular construction has time and time again proved the right answer to a crisis, problem or change, it becomes a much simpler decision as to whether or not it’s the right investment choice. Add to that the fast-growing knowledge about the importance of eco options and sustainability and modular construction becomes an even more compelling proposition.

Modular construction is already part of India – and the world’s – property development needs. And that’s something that is only going to increase as it becomes a major element of the construction landscape. Not only due to its speed of delivering the finished, habitable product, but also its cost-effectiveness, green credentials and sustainable factors it brings.  That’s why Red Ribbon was committed to Modulex Construction from the very beginning of the project and we remain committed to it today. I’m convinced it is not only a vital element in meeting market challenges but will also deliver on the unprecedented opportunities currently presented by the subcontinent’s burgeoning economy.

Modulex is the answer to many of India’s immediate needs and beyond. By creating sustainable, cost-effective homes and buildings across the country, Modulex is part of a growing industry that will remain relevant and profitable for many, years to come.

Key Benefits Modular Construction - Red Ribbon Asset Management Plc

Key Benefits of Modular Construction

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Right now, the demand and requirement for residential and commercial property across India remains elevated. And, true to form, the relevant industries are supporting that need in the best way they can – constructing buildings. However, having relied upon mainly traditional methods for so long, that’s the go to option in many cases.

Enter modern, modular construction.

Modular construction techniques have come a long way since the first attempts in the 1800s. Indeed, they’ve even evolved and improved vastly in the past 10 years. That’s part of what makes it a big part of the answer to India’s requirement for homes and business premises. Add to that the easier property construction regulation under forward thinking Prime Minister Modi’s RERA act and modular construction is most definitely an option drawing increased interest. Not only across India, but globally, too.

There are many reasons why that should be the case and is now becoming so.

Why modular construction is an essential part of the solution to India’s housing needs

Because modular construction is an excellent way to create housing and commercial properties of all shapes and sizes, quickly and relatively affordably. This has helped encourage thought and investment into the industry, with extremely positive results.

That’s not to say it should completely take over traditional property construction methods. There’s absolutely room for all kinds of skills and ways of building. However, modular construction is no longer a final thought or last option. It’s right up front with all the other property construction methods, which is exactly where it should be.

Its cost-effective

When it comes to building property, its not something that could ever realistically be described as ‘cheap’. One thing that makes modular construction a more cost-effective building option is the use of set, factory-based methods.

This is particularly relevant for apartment blocks, or developments where properties will feature the same internal layout. Having a set pattern for the off-site, factory construction, means fewer plans, designs and templates are required. This also helps support a more efficient work-rate. In addition, among the various ‘major costs’ of on-site construction, is the wages of builders, supervisors and other professionals, who need to be there. With modular construction, many of the builders only need to be on the actual building site for between a quarter and half of the time they would on traditional build.

Eco-credentials

Building property will always have pros and cons. Among the cons is the amount of waste and also the often-difficult task of ensuring all required energy efficiencies are made-to-measure and in place from the beginning. Utilising a purpose-built modular factory dramatically improves waste control. That’s borne of working to specific measurements in an environment that makes it easy to order only exactly what you need.

That’s not to say that traditional building methods aren’t precise and materials ordered accordingly. But, without such controlled conditions, over-ordering and materials waste is notably higher. But that’s not the only green credential modular construction techniques lay claim to.

By constructing all the internal wall panels and other elements of a modular building in a factory, it’s much simpler to ensure all the required energy efficiencies are fully installed, at source in the right way. This makes any eco-friendly options easier to safely install in the factory. Solar panels, water saving features and suitable heat conservation, or air circulation requirements can be handled in a controlled, measurable way, using the right materials and methods.

Modulex Construction is the World’s largest and India’s first Steel Modular Building Company, setting out to meet the challenges posed by India’s urban housing shortages in a practical and dynamic manner. The company is at the heart of a project established by Red Ribbon to harness the potential of India’s markets and delivering opportunities for investors. Because, when it comes to investing on the subcontinent, nobody knows India and its markets better than Red Ribbon.

Red Ribbon CEO, Suchit Punnose said:

India’s housing needs are no secret. But nor are the advances in techniques to help support faster and more cost-effective construction options. Add to that a supportive Government regulatory environment it begins to make sense that all types of reliable and suitable methods are put to good use. We, along with an increasing number of professionals, investors and industry specialists, know that modular construction is a major part of the answer to India’s housing needs.

Modular construction is already part of India – and the world’s – property development needs. And that’s something that is only going to increase as it becomes a major element of the construction landscape. Not only due to its speed of delivering the finished, habitable product, but also its cost-effectiveness, green credentials and sustainable factors it brings.  That’s why Red Ribbon was committed to Modulex Construction from the very beginning of the project and we remain committed to it today. I’m convinced it is not only a vital element in meeting market challenges but will also deliver on the unprecedented opportunities currently presented by the subcontinent’s burgeoning economy.

India Real Estate - Red Ribbon Asset Management Plc

Time matters with India’s Real Estate revitalisation

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KPMG reported last month that Indian Real Estate Sector has now entered a “revitalisation mode”, with aggregate growth projected to reach $ 650 Billion by 2025 and topping $850 Billion by 2028: the average yearly contribution of real estate to the Indian economy will more than double from its current 7% by 2025. And CBRE India are equally optimistic: in their own quarterly report, snappily titled “India Real Estate: Variance in Construction Costs”, they forecast 17 Million new jobs will be added to the sector and an additional 8.2 Billion square feet of space released by 2025.  It all resonates well with the ambitions objectives of Prime Minister Modi’s Affordable Housing Programme, with Real Estate now set firmly in growth mode, and growing stronger every year. But there’s a dark shadow in the garden…

Each of these influential reports has highlighted a potential issue relating to construction costs on the subcontinent, capable of acting as a brake on growth and with no less than six major conurbations (Chennai, Pune, Hyderabad, Mumbai and Delhi) causing particular concern. Perhaps predictably, Mumbai tops the list of areas where unit construction costs have spiralled over recent years and show little sign of slowing down despite the broadly stabilizing effect of GST legislation introduced by the Modi Administration which helped smooth out some of the worst supply and pricing differentials across the country.

The average cost of construction for a residential apartment in Mumbai is now Rs 3,125 per square foot, compared to the Rs 2,375 per square foot the same apartment will cost in Hyderabad. At one (macro) level the reason for all this is obvious: an increasingly urbanised population pushing up demand for units in the largest conurbations as part of a gradual drift away from the land, but the disparity in relative costs between conurbations is still striking. Inter market differentials of this kind are likely to be caused primarily to an uneven distribution of construction skills, with highly skilled workers drawn to areas of greater demand so increasing the unit cost of labour in specific areas of the subcontinent. Certainly we might expect other variables such as recent sharp rises in the wholesale price of steel to be more uniformly spread across the country.

In short, construction is becoming progressively more expensive in the very areas where more housing and commercial units are likely to be needed most…and that’s a real dilemma.

One answer is to make greater use of just in time delivery systems which are capable of dramatically reducing overall construction schedules: simple maths tells us that if an expensive worker is on site for a quarter of the normal building phase, costs will come down no matter how prohibitive the daily rate. And of course we have now grown used to the significance of just in time methodologies because of the prominence the issue has assumed as part of the current Brexit debate. Just as any significant inhibition on frictionless trade has potential to throw the UK economy into chaos after Brexit, so too the same frictionless technologies can help address systemic cost differentials across the Indian construction sector as well.

Modular Construction prefabricates all of the essential components of the building off site, everything from exterior walls, ventilation systems and internal wiring networks with the parts then arriving on location only when they’re needed: meaning field workers aren’t left waiting around (expensively) for the next phase of the project to get underway. Research has shown that through a combination of just in time delivery techniques and modular technology, otherwise complex units such as student accommodation blocks or hospitals can be erected on site in days rather than the months and sometimes years of conventional technologies. And an added advantage is that Modular Technology also reduces the potential for human error and snagging in the final building which can also be a major but hidden expense on any project.

Modulex Construction is the World’s largest and India’s first Steel Modular Building Company, setting out to meet the challenges posed by India’s urban housing shortages in a practical and dynamic manner. The company is at the heart of a project established by Red Ribbon to harness the potential of India’s markets and delivering opportunities for investors. Because, when it comes to investing on the subcontinent, nobody knows India and its markets better than Red Ribbon.

Red Ribbon CEO, Suchit Punnose said:

Prime Minister Modi has successfully appealed to the youthful and increasingly urbanised population that is currently driving India’s economic growth, not least through his Government’s re-energised Affordable Housing Programme the scale and scope of which has at times been breathtaking. So it should come as no surprise to learn that such an increasingly mobile population is also creating real estate hot spots (and cost differentials) through being attracted to a number of specific locations: by definition, a mobile population is difficult to keep still.

So as it seems to me the resulting cost differentials in construction across the subcontinent are likely to be a fact of life for some years to come yet. But that’s certainly not to diminish the problem, and cost disparities are a problem in India’s most expensive real estate markets, Mumbai in particular. They have real potential to distort the market.

In delivering a workable solution to that challenge most expert commentators now agree that Modular Construction is simply inescapable. No other technology offers the pace and scale of delivery needed to meet India’s housing needs and, as the article points out, it is the perfect corollary for just in time delivery systems. That’s why Red Ribbon was committed to Modulex Construction from the very beginning of the project and we remain committed to it today. I’m convinced it is not only a vital element in meeting market challenges but will also deliver on the unprecedented opportunities currently presented by the subcontinent’s burgeoning economy.

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Modular Construction: the answer to the shortage of skills in India

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Most Indians work in agriculture but next comes construction, and according to the latest Economic Survey the subcontinent’s real estate and construction sector is likely to create more than 15 Million jobs over the next five years, that’s three million every year. To put that in perspective less than 3 Million people are currently employed in the entire UK construction industry. And of the 52 Million building workers employed by Indian companies, 90% are involved in on-site construction with the other 10% busily painting, plumbing and wiring the finished product. It’s fair to say all these painters, plumbers and electricians are skilled workers…but not so the other 90%.

Because the vast majority of India’s construction workers are either minimally skilled or have no skills at all: an astonishing 97% of them aged between 15 and 65 will receive no formal training of any kind before starting work on site and, plumbers and painters aside, most of the skilled workers won’t be getting any cement dust on their boots because they’re probably office based clerks, technicians and engineers. And that’s a real problem…

It’s a problem, because coming the other way down India’s infrastructure and logistics superhighway is an unprecedented surge in demand for urban housing, fuelled by an increasingly urbanised population projected to become the biggest on the planet by 2022. India’s National Skill Development Council predicts that by then the real estate and construction sector will require a workforce of more than 66 Million, so without any obvious core of skilled workers currently able to sustain anything like growth it’s no wonder the sector is starting to show signs of stress.

Of course all this was supposed to be addressed by 2016’s Real Estate (Regulation and Development) Act which was intended to act as a platform for local, State driven planning capable of creating an appropriate environment for improved training and regulatory structures, but so far six States out of 29 have failed to produce any plans at all under the legislation which means finding workers with the right skills in the right place will continue to be a source of real concern.

Billionaire developer Niranjan Hiranandani, head of Hiranandani Construction, has a simple enough solution: just pay unskilled workers less and reap the savings while you can. But that’s not a particularly attractive solution for anyone buying one of his apartments 76 floors up in the Mumbai skyline where quality assurance is far from being a dispensable extra. The behemoth that is Hindustan Construction Company perhaps takes a slightly more realistic approach, going on record last week to say that skills shortages have become a huge problem for the sector: 50% of its workforce needs advanced training just to use the complex machinery now prevalent on most modern building sites. With a heavy tone of understatement a spokesman for the company announced grandly that given these skilled workers are not available, “the only option is to train them”.

Well, it’s not quite the only option…

With no actual shortage of workers seeking employment in India’s urban conurbations, particularly in the light of a seemingly inexorable drift of former agricultural workers from country to town, what if the physical construction process itself could be de-skilled? Why not make a virtue of necessity and draw on this pool of former agricultural labourers to release the margins of between 20% to 70% that Deloitte India predict would follow from a wholesale deskilling initiative? These savings would go straight to the bottom line without endangering the quality and safety of the finished building. Skilled construction workers earn Rs 1,000 a day as opposed to their unskilled counterparts who earn an average of Rs 200.

And there is just such a business model on the market right now, a model with the potential to uncouple construction projects from a seemingly insoluble skills conundrum: it’s called Modular Construction.

Modern Modular technologies allow all of the building’s key components to be put together off site by specialist workers and then assembled locally at the same time as the site works are completed, not only reducing overall completion schedules by as much as 50% but also significantly reducing the need for skilled workers in the construction phase. All of the design and engineering disciplines are instead concentrated at the offsite manufacturing facility leading to labour, financing and supervision costs. Which will all be music to Mr Hiranandani’s ears…

Modulex Construction is the World’s largest and India’s first Steel Modular Construction Company, meeting the challenges of the subcontinent’s current urban housing shortages in a practical and focused manner. The company was founded by Red Ribbon as part of an innovative project to harness the potential of India’s dynamic and evolving real estate markets whilst at the same time delivering opportunities for investors through Red Ribbon platform. Because, when it comes to investing on the subcontinent, nobody knows India’s markets better than Red Ribbon.

Red Ribbon CEO, Suchit Punnose said:

Delivering on India’s stringent housing targets over the next five years presents an enormous challenge for the subcontinent, and that challenge is likely to get more testing still given the underlying demographics of a rapidly increasing and ever more urbanised population. Existing skills shortages within the construction sector have the potential to be a crucial block to meeting these targets, especially given the scale and scope of the training programmes necessary to release a further 3 Million workers into the sector every year for the next five years: never mind the attendant costs which are likely to be eye watering on any basis.

That’s why to my mind the answer has to be Modular Construction. No conventional technologies can beat it for sheer pace of delivery and, with a centralising of skilled labour in the offsite manufacturing facility, it will beat conventional construction methods hands down on overall profitability too.

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An Ambition for Growth: The Roots of India’s Economic Miracle

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Currently locked in a peculiar species of death roll with her backbenchers, Theresa May still (to her credit) seems intent on securing an orderly exit from the EU by 2020, but most economic commentators are forecasting a long term decline in UK GDP however “soft” the exit terms might be. Price Waterhouse for one are predicting that within a decade of exit, by 2030 the United Kingdom will have fallen to tenth place in Global GDP, behind Mexico and Indonesia and a whisker ahead of Turkey and France (which has a certain irony in the circumstances). And the same survey predicts that by 2030 India will have risen to third place in the global league, treading hard on the heels of China and the United States in first and second place respectively. But unlike the former mother country there is no suggestion that the subcontinent’s remorseless ambition for growth will lose any of its momentum over the course of the next half century.

China had better watch out…

The subcontinent’s economic ambition has been powered by a combination of progressive (some might say revolutionary) economic policies on the part of Prime Minister Modi’s Government (think demonetisation), coupled with a burgeoning and increasingly middle class population fuelling an unprecedented surge in consumer demand. But in a subtle and complex take on that dynamic, McKinsey this month published a fascinating report concluding that India’s explosive growth has just as much to do with interlocking trends in agriculture, urbanisation and mobility.

Take the first element in that triumvirate: agriculture. For decades now (at least the last thirty years), India has pursued an aggressive policy of agricultural self-sufficiency which has not only made the farming lobby one of the most powerful political forces in the country but has also delivered growth rates in the sector that are the envy of most of its near neighbours (indeed, the envy of most farmers anywhere in the world). But despite this, as McKinsey also point out, Indian agriculture still faces a spectrum of uniquely local challenges: severe water shortages alternating with devastating monsoons, combined with often antiquated supply structures and what McKinsey quaintly call a “limited exposure to high productivity practices”: in other words, a lack of investment in the latest farming technology.

That’s where the subtlety comes in…The Indian Government has re-calibrated its agricultural policy to shift the emphasis away from output targets, replacing them with a system of local subsidies designed to buttress farmers’ income (a policy that roused the never less than exuberant President Trump to bring proceedings against India again before the WTO). It was a smart shift in direction too because the new policy will almost certainly double agricultural wage rates by 2022 and, in a characteristically Keynesian frame of mind, the Modi Government are betting that with more money in their pockets India’s farmers will now start investing more in new technology. It can’t do much to stop monsoons but it can, as McKinsey would no doubt put it, “increase exposure to high productivity practices”.

That same factor feeds into the second limb of McKinsey’s triumvirate: urbanisation. More than 200 Million of India’s rural population are expected to move into its urban conurbations over the next 15 years and for those with the instinct to move rather than invest locally, improved agricultural subsidies are giving them a store of money to do it with. And, the Modi Administration is playing to its strengths on this too with a new Smart Cities Mission designed to meet the additional, affordable housing required to cope with resulting surges in demand, reducing urban pollution levels and increasing resource productivity and economic development through enhanced infrastructure programmes. You don’t need to look any further to find the real roots of India’s economic miracle.

And what about mobility: the third element of the McKinsey triumvirate? Well, that’s coming along nicely too with India now expected to become the world’s third largest passenger vehicle market by 2021. It’s not just that the subcontinent offers the same, parallel opportunities and challenges as other western and developing markets, it is offering them with a turbo charger attached. Many of those 200 Million people who are moving from village to town over the next 15 years will want (and get) a car, paying for it with the increased wages earned from working on all those new infrastructure projects; and their family and friends who stayed in the country and invested in new agricultural technology will probably want (and get) a new car too. You need to keep up with your cousins in town!

That, in essence, is what we mean by an interlocking economic structure, and it’s here that we can find the real roots of India’s explosive growth. Just wait to see what happens next…

Nobody understands that potential for growth better than Red Ribbon Asset Management, which has placed India at the very heart of its investment strategies since the company was founded more than a decade ago. With an unrivalled knowledge of market conditions on the subcontinent, Red Ribbon offers a unique opportunity to share in that vast potential.

Red Ribbon CEO, Suchit Punnose said:

At Red Ribbon we are very proud to have been playing our own part in India’s economic resurgence over the last decade, investing in just the kind of projects that are at the heart of the interlocking triangle of growth mentioned in the article: everything from the modular construction technologies now being developed by Modulex so as to deliver affordable housing at the pace demanded by the subcontinent’s urban expansion, through to innovative sustainable energy infrastructure investment. And to see India now firmly established at its place on the economic top table, uniquely well placed to move further forward still is, of course, a particular source of pride for us.

We look forward to continuing to play our part in India’s future, participating to the utmost in the opportunities the subcontinent’s explosive growth has to offer and at the same time providing above market rate returns from our investors in what I am convinced will continue to be one of the world’s most exciting markets for many years to come.

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At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.

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