A great ho­tel plan comes to­gether

Mo­du­lar con­struc­tion has proved a win­ning formula for build­ing projects in UK

China Daily European Weekly - - Front Page - By CECILY LIU cecily.liu@mail.chi­nadai­lyuk.com An­gus McNe­ice con­trib­uted to this story

When China’s CIMC Mo­du­lar Build­ing Sys­tems com­pleted the con­struc­tion of the 220-room Hol­i­day Inn Ex­press in Manch­ester in only 39 weeks, it made his­tory as the first large-scale mo­du­lar build­ing of its kind in north­west Eng­land.

Not only was the pro­ject quick and cost-ef­fec­tive, its con­struc­tion method of stack­ing to­gether large seg­ments to build the ho­tel’s foun­da­tion also at­tracted great in­ter­est in the Manch­ester area, as res­i­dents could watch a large crane stack­ing them on site.

The pro­ject isn’t a one-off. Rather, it rep­re­sents a de­vel­op­ment in cut­ting-edge mo­du­lar con­struc­tion, a trend Chi­nese com­pa­nies are push­ing for­ward in the UK af­ter achiev­ing tremen­dous suc­cess with the tech­nol­ogy at home.

“In ad­di­tion to cost ad­van­tages, mo­du­lar con­struc­tion also pro­vides cer­tainty, qual­ity and re­duced risks,” says Michael Crane, de­sign di­rec­tor of CIMC MBS.

“The two largest risks in con­struc­tion are how to get a pro­ject out of the ground and how to keep it wa­ter­tight dur­ing con­struc­tion. Mo­du­lar units, trans­ported in ship­ping con­tain­ers, are guar­an­teed to be wa­ter­tight,” Crane says.

Ac­cord­ing to Crane’s es­ti­mates, mo­du­lar con­struc­tion pro­vides cost sav­ings of around 25 to 30 per­cent over con­ven­tional con­struc­tion meth­ods through re­duc­tions in cap­i­tal costs, time and on-site costs.

So far, CIMC MBS has worked on more than 10 projects in the UK, mainly build­ing stan­dard mo­du­lar units for ho­tel rooms at its China fac­tory and then ship­ping them to con­struc­tion sites. Clients in­clude In­ter­Con­ti­nen­tal Ho­tels Group, Ac­cor and Hil­ton. Its first pro­ject was the Trav­elodge ho­tel in Lon­don’s Uxbridge, com­pleted in 2008, fol­lowed by the con­struc­tion of a Pre­mier Inn at Gatwick Air­port, com­pleted in 2009.

Its work has so far re­ceived great feed­back from clients. Peter de la Per­relle, man­ag­ing di­rec­tor of Tower Ho­tel Man­age­ment, which will be op­er­at­ing the Hol­i­day Inn Ex­press in Manch­ester, says that, while the novel ap­proach is marginally cheaper than tra­di­tional meth­ods, the real ben­e­fit is that the ho­tel can be built quickly.

“With tra­di­tional meth­ods, it takes about 18 months. We are on sched­ule for a 41-week build. So, you’re bring­ing your prod­uct to mar­ket a lot quicker and can start earn­ing money on the in­vest­ment sooner than you would with nor­mal meth­ods,” de la Per­relle says.

“It has gone beau­ti­fully. The main build­ing con­trac­tor has been very im­pressed with the smooth­ness of the op­er­a­tion — the pods ar­rived on site on sched­ule and the build pro­gram is spot-on. It’s been a great col­lab­o­ra­tion be­tween the build con­trac­tor and CIMC,” he says.

CIMC MBS is a sub­sidiary of China In­ter­na­tional Ma­rine Con­tain­ers, a Shen­zhen­head­quar­tered com­pany founded in 1982. It ini­tially started as a man­u­fac­turer of ship­ping con­tain­ers but over the years ex­panded into build­ing ships, tank stor­age fa­cil­i­ties and oil rigs, and even fi­nanc­ing projects.

China In­ter­na­tional Ma­rine Con­tain­ers es­tab­lished its sub­sidiary CIMC MBS in 2004 to pro­vide mo­du­lar build­ings in­ter­na­tion­ally.

CIMC MBS es­tab­lished of­fices in the UK in 2011 when it ac­quired the mo­du­lar sys­tem de­sign com­pany Ver­bus. Ver­bus was es­tab­lished in 2005 and has worked with CIMC MBS in trans­port­ing mo­du­lar units. It was hit badly by the re­ces­sion, as clients be­came more con­ser­va­tive and switched to tra­di­tional con­struc­tion.

CIMC MBS saw value in Ver­bus and felt op­ti­mistic about the growth of mo­du­lar con­struc­tion in the UK, so it ac­quired the com- pany, which at the time had three em­ploy­ees. The team has grown to 10 staff mem­bers, who mainly talk to UK com­pa­nies and com­mu­ni­cate their needs to the Chi­nese head­quar­ters.

“One big change that has greatly fa­cil­i­tated the com­pany’s UK growth is the de­ci­sion four years ago by CIMC sub­sidiary CIMC Cap­i­tal to fi­nance some of the com­pany’s projects in Bri­tain,” Crane says.

Be­fore that, CIMC was only a sub­con­trac­tor in the con­struc­tion process, de­pen­dent on sat­is­fy­ing the re­quire­ments of many other par­ties in the process, in­clud­ing the in­vestor, de­vel­oper, main con­trac­tor and de­sign team.

But by hav­ing CIMC Cap­i­tal be­come the in­vestor in a pro­ject, the com­pany can in­flu­ence pro­ject guide­lines to suit its own sys­tems and ca­pa­bil­i­ties. For ex­am­ple, it can make mi­nor ad­just­ments to the scale of a ho­tel room unit to make the man­u­fac­tur­ing or trans­porta­tion process more suit­able for its sys­tems.

Crane says the ar­range­ment with CIMC Cap­i­tal took a long time to es­tab­lish be­cause such a model was un­prece­dented for the com­pany and for UK ho­tel groups.

Tra­di­tion­ally, the ho­tel groups pay for mo­du­lar units in ad­vance, ef­fec­tively pur­chas­ing them from CIMC MBS. But if CIMC Cap­i­tal fi­nances the over­all pro­ject, it re­serves the right to take over the ho­tel if it can­not suc­cess­fully pay back the bor­rowed amount within the agreed time­frame.

Crane says CIMC Cap­i­tal does its own due dili­gence on projects and only in­vests in projects that make sense fi­nan­cially to the com­pany.

De­spite the op­ti­mism and ad­van­tages of mo­du­lar con­struc­tion, Crane says it is still a new field and some­times clients do not like to be early adopters. Most of their projects have been in op­er­a­tion for two to three years, but many ho­tel groups want to see es­tab­lished projects which have run for five to 10 years.

CIMC MBS’s ex­pan­sion into the UK’s mo­du­lar con­struc­tion mar­ket came at a time when many other Chi­nese com­pa­nies also saw this op­por­tu­nity.

Last year, China Tri­umph In­ter­na­tional En­gi­neer­ing Co an­nounced a plan to build six mo­du­lar hous­ing fac­to­ries in the UK over the next five years. They will cre­ate 25,000 new homes and em­ploy 200-250 peo­ple in each fac­tory.

Mean­while, Bei­jing Con­struc­tion En­gi­neer­ing Group is also bring­ing mo­du­lar con­struc­tion ex­per­tise to the £800 mil­lion ($1.2 bil­lion; 1.04 bil­lion euros) Manch­ester Air­port City pro­ject, in which it is also an in­vestor.

Crane is op­ti­mistic about CIMB MBS’ fu­ture de­vel­op­ment in the UK’s mo­du­lar con­struc­tion mar­ket and. Mean­while, his team is ex­plor­ing a new busi­ness area, which is to ex­pand mo­du­lar con­struc­tion to Africa in part­ner­ship with UK ho­tel groups. Hav­ing a base in Lon­don is per­fect for this work be­cause Lon­don is where many African ho­tels are fi­nanced, he says.

At the Africa Ho­tel In­vest­ment Fo­rum in 2015 in Ethiopia, CIMC MBS worked with Hil­ton to ex­hibit a mo­du­lar ho­tel room at a re­cep­tion Hil­ton hosted the evening be­fore the con­fer­ence.

“Hil­ton wanted to show the African in­vestors that, if they or­der a Hil­ton mo­du­lar ho­tel room from CIMC MBS, this is ex­actly what they would re­ceive — the same room, the same qual­ity, same ma­te­ri­als and same stan­dards,” Crane says.


CIMC Mo­du­lar Build­ing Sys­tems’ new ho­tel con­struc­tion pro­ject in Manch­ester.

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