The modular construction market - France (2024)

1.2 The global modular construction market

The global modular production market is estimated at $** billion in ****, rising to $***.* billion by ****. This implies an average annual growth rate of +*.*% over the period ****-****.

Global modular construction market World, ****-****, in $ billions CAGR: +*.**% Source: ****

Using data made available by the United Nations via the Comtrade database, it is possible to chart the main countries exporting or importing prefabricated buildings (***).

China dominates international trade, with $*,*** billion worth of prefabricated building exports. Germany, the Netherlands and the USA are also major players in international trade in prefabricated buildings.

Main trade flows of prefabricated buildings worldwide World, ****, in millions of dollars Source: ****

1.3 The French market

The modular construction market will be worth *** million euros in ****. It employed *,*** people in ****, for the equivalent of ***,*** square meters of modular constructions installed.

The market is growing strongly, with a **% increase between **** and ****. After a slowdown due to the Covid crisis, it is set to rise again by +**% in ****.

Industrialized and modular construction sales France, ****-****, in millions of euros Source: ****

Of the sales generated by the sector in ****, **% will be attributable to the property rental segment. The other segment, sales, accounted for **%.

Thus, in ****, the rental stock will reach an annual value of *** million euros and sales of *** million euros. [***] However, sales of modular space are growing more vigorously (***).

Breakdown of sector sales by business segment France, ****, in millions of euros Source: ****

1.4 France, a net importer of modular buildings

The modular construction business is listed by the General Directorate of Customs and Excise under the following codes:

******** - Prefabricated buildings, of wood, whether or not complete or assembled ******** - Prefabricated greenhouses, whether or not complete or assembled, made exclusively or mainly of iron or steel ******** - Prefabricated buildings, whether or not complete or assembled, made exclusively or mainly of iron or steel (***) ******** - Prefabricated buildings, whether or not complete or assembled (***)

Exports, imports and market coverage for modular construction France, ****-****, in millions of euros and as a % of sales Source: ****

In ****, French modular construction exports will cover only **% of its imports. This figure is down * points on the previous year, as imports have picked up after the slowdown due to the Covid crisis.

Destination of modular construction exports France, ****, in Source: ****

France exports mainly to Europe (***).

Origin of modular construction imports France, ****, in % Source: ****

France imports mainly from Italy, China and Portugal.

1.5 A market temporarily held back by the Covid-19 pandemic

The early days of the Covid-** pandemic were very difficult for the modular construction industry. According to a study carried out by INSEE, the drop in activity amounted to **% during the first phase of containment. Rental companies were also faced with a demand from their customers to break their contracts, even though their goods were stored in the modular structures.

However, a survey carried out at the end of summer **** on the resumption of building sites in the communes reassures us about the health of the modular construction sector. None of the players questioned were planning to close any sites, indicating a degree of confidence in the future. At the same time, the proportion of players anticipating an increase in margins is up six points on June, while the fear of having to extend delivery times is down * points. In addition, almost a quarter of those surveyed (***) anticipate an increase in sales.

Order books are relatively full, with contracts signed with the construction and public works sectors up by *.* and *.* points respectively. This can be explained by the fact that public-sector orders are catching up, with the resumption of projects frozen by both the first confinement and the municipal elections.

However, ...

2.1 Demand and its determinants

A gradually diversifying customer base

initially, the modular construction market was centered around a single customer segment: the construction industry, to help build construction sites. In recent years, however, other customers have emerged, such as the public sector (***).

The individual and collective housing segment : According to Le Moniteur, players in the modular construction market were already present in the construction of student residences and retirement homes, but are now investing in the construction of individual and collective housing. Costs for customers are said to be lower, with savings of **% to **% and delivery times two to three times faster.

Modular building is developing to serve the ephemeral economy. The modular format is perfectly suited to the needs of temporary and seasonal activities. These concepts are appearing in one-off marketing operations with pop-up stores, or in a "guinguette" spirit with fast-food establishments. [***]

An important factor in the demand for modular construction is urbanization.

Urbanization trends France, ****-****, in % Sherbrooke University

We can see here that urbanization is growing steadily in France. However, the increase remains relatively stable.

We can also look at construction costs, since if they're too high, demand may fall back on modular construction.

Construction cost trends France, ****-****, index base ...

2.2 Customer sectors

The modular construction market is divided into two main sectors: rental and sales. Each branch has its own outlets in different sectors.

Modular buildings, once associated mainly with the construction industry to meet temporary needs on building sites, have extended their use to a variety of strategic sectors. Local authorities adopt them for rapid expansion and disaster recovery, while the healthcare sector favors them for the creation of infirmaries, laboratories, doctors' surgeries and viral testing centers. Industry uses them to expand production sites and provide storage space. In the service sector, modular buildings optimize workspaces, reduce flow in open spaces and create temporary meeting rooms. The event industry exploits them for trade shows, sanitary facilities, conference rooms and ticket offices. [***]

modular sales growth by outlet France, ****-****, % [Small Source: ****

In ****, according to the benchmark survey by Astérès for ACIM, half the buyers of modular buildings were companies in the "industry, services and events" sector, nearly a third were public authorities and the remainder were construction companies. [***] However, recent market dynamics, catalyzed by the health crisis, have reshuffled the deck. The administration segment, which saw the strongest growth in ****, saw its revenues fall by **% in ****, while in the industry segment, ...

2.3 Increasingly eco-friendly demand for wooden modules

The recent development of wooden modules has seen the arrival of new players in the market, particularly in the housing segment (***). This development is due to the promising growth of wood construction in France. Indeed, the authorities are subsidizing and developing this market with a Wood Construction Plan from **** to ****.

Among the main players in this segment, BH, a subsidiary of boat manufacturer Bénéteau, offers a MUSE concept for social landlords, featuring prefabricated wood-frame modular homes. Other offerings include GINKGO, a specialist in turnkey wooden houses (***), and AIREMODULAIRE, which designs low-energy, three-dimensional modular wooden houses.

The ecological argument is a strong criterion driving demand for wooden modular construction. Indeed, this type of construction is more respectful of the environment thanks to the use of renewable and renewed wood, a transformation process that emits little CO* and a relative ease of recycling construction materials. This is a significant criterion at a time when people are becoming increasingly sensitive to these issues, yet the construction industry is the most polluting industry in France.

evaluation of pollution emitted by the construction industry France, ****, % Source: ****

The use of wood would considerably reduce these emissions, since it not only pollutes much less than steel ...

2.4 The rise of modular construction as a solution to the low profitability of the building industry

As the decline of the construction industry seems inexorable, the sector needs to adopt new methods. One answer to the building crisis could be the use of off-site construction. This currently accounts for **% of the French construction market, but **% of companies in the sector plan to invest in this area over the period ****-****.

Off-site to cut lead times and costs

At a time when construction costs are constantly on the rise, resorting to off-site construction is a way of saving money. In ****, for example, costs rose by between **% and **% in just a few months for the tertiary sector. Yet while modular construction has high initial costs, which can be up to *% higher than for the on-site equivalent, it offers a considerable reduction in expenditure when the project as a whole is considered, up to -**%. This is thanks to delivery times that are at least six months shorter.

Off-site cost advantages and disadvantages France, ****, % Source: ****

Off-site advantages according to users France, ****-****, in Off-site

BTP costs seem to be becoming less and less advantageous compared to off-site costs, since between **** and ****, **% more off-site users declare that an advantage of off-site is cost reduction.

Overcoming skills shortages in the construction ...

3.1 Competitive intensity limited by market structure

The modular construction market is characterized by a small number of players and limited competitive intensity (***), with a few behemoths such as Algeco and Yves Cougnaud. There are around ** major players in the modular construction market, the remainder being made up mainly of SMEs with a more local reach, which fragment the market.

Sales of main competitors on the market France, ****, in millions of euros Source: ****

The two biggest players in the French market (***) take the lion's share of the modular construction market. While Yves Cougnaud has recently become the market leader in France, its activities are limited to the national territory, whereas Algeco is the world leader, with worldwide sales of US$*** million in **** and US$*.* billion in ****.

Market share of the * biggest players in the sector France, ****, in Source: ****

The market structure is explained by relatively high fixed production costs, which require economies of scale to be profitable. As a result, barriers to entry are high in this market in terms of capital requirements. Most substitute products are not economically competitive.

The high level of concentration in the modular construction market is also reflected in financial mergers and acquisitions. These operations enable players to join forces in order to ...

3.2 Case study: understanding barriers to entry

An analysis of the annual reports of Algeco, one of the industry's leading companies, provides an insight into the cost structure and investments required in the market (***).

Of particular note is the high proportion of fixed costs, which totaled €*** million in FY ****. This cost structure is explained by the industrial production capacity of prefabricated structures, which requires an expensive production tool.

Cost structure and revenues

In addition to cost analysis, there are a number of other important factors, including taxes and the level of investment. As taxes are similar for each sector, we prefer here to focus on the level of CAPEX, which represents almost **% of EBITDA (***):

A high level of CAPEX France, ****-****, in millions of euros Source: ****

to this can be added an analysis of WCR (***), the metric having increased by ** million euros over **** for the Algeco company. This reveals a balance of power to the disadvantage of builders, who are therefore paid with a relatively long lead time.

In summary, the various barriers to entry in the sector can be explained by :

A cost structure that requires volume to benefit from economies of scale; High levels of investment, requiring sound financial health to support borrowing; A balance of ...

3.3 The production system and its advantages

Modular building production involves the factory assembly of entire buildings from prefabricated modules, which are then placed on foundations.Modular construction is part of the wider real estate sector, of which it can be both a corollary and a substitute product. Indeed, in addition to reducing the construction risk inherent in real estate development activities, modular construction can offer several advantages:

According to IFS, production is carried out in local factories, with the creation of entire apartment blocks or site modules. Interior finishes are also produced locally, then manufactured on a large scale, transported and assembled on site.

According to a McKinsey study reported by IFS, this production process enables savings of **% on labor costs and delivery times. In-plant production also reduces construction air and noise pollution, and enhances worker safety.

The MonDevis website provides some interesting information on the production of modular buildings. According to the site, which takes the example of a "kit house", the cost of labor is estimated at **% of the total construction price. This compares with **% to **% of the total cost of building a conventional house.

like Actimodul, many companies in the modular construction sector are vertically integrated. The company takes care of *D design, building ...

3.4 Reorganizing the value chain

The January **** report from the French Ministry of Housing gives an account of the changing distribution of value in the construction industrialization market. In particular, the report highlights the verticalization of the sector worldwide, with materials manufacturers tending to control downstream supply chains, and developers moving into the upstream chain. These two types of player are also involved in numerous cross-industry partnerships, since the industrialization of the sector presupposes the development of long-term partnerships between customers and suppliers.

This trend is accompanied by a tendency towards internalization and consolidation, with the aim of creating the modular construction players of the future, at a time when the market is becoming increasingly vast and international.

The industrialization of construction is also characterized by a shift in value from the building site to the factory. Today, structural work, i.e. the building's framework, accounts for **% of a project's overall costs. With modular construction, this is considerably reduced, and a significant part of the margin is now captured further up the value chain.

In timber construction, for example, added value on the building site is already reduced to **% of the total. However, the implementation stage still accounts for **% of the workforce in the timber construction ...

3.5 Focus on eco-friendly modular wood construction

Modular wood construction is a fast-growing building method involving the prefabrication of wooden components in a factory, followed by their assembly on the building site. This approach offers rapid construction, a cost reduction of around **% compared with traditional construction, enhanced energy performance thanks to high-quality insulation, and great flexibility for extensions . What's more, wood is affordable, durable, environmentally friendly and aesthetically appealing. It emits little waste, is ***% recyclable and meets high energy-efficiency standards, sometimes similar to those of passive houses. However, modular wood construction can generate a carbon footprint due to the transportation of modules to the site, present limitations in terms of customization and financing challenges from banks. Despite these drawbacks, it is an excellent alternative for those who want aesthetically pleasing, durable and affordable buildings, while minimizing their environmental impact.

[***]

Modular wood construction is a building method based on workshop prefabrication. It is currently enjoying renewed interest as an efficient, sustainable solution for a variety of building types. Whether for collective housing, single-family homes, temporary structures or workplaces, this approach can be adapted to a wide range of building types. It is based on the assembly of prefabricated wooden modules, custom-designed and transported to the construction site. The ...

4.1 Customer-specific modular construction forms

The modular construction system is based on the construction of a two- or three-dimensional metal, wood or mixed structure, which can be prefabricated (***). They can also be stacked to create several storeys.

The system is based on the manufacture of ** to **% of the modular elements in the workshop, including, as required, a watertight/airtight finish with all technical and finishing trades. The remaining **-**% of the work is carried out on site, to assemble the modules, adapt them to the constraints of the terrain and customize them to the visual and technical requirements of the project. [***]

Several types of modular construction to suit requirements

The best-known modular constructions are the prefabricated building, which has been the precursor of modular construction since the ****s, the modular building, which is made up of rectangular modules, and modular panels. of rectangular modules, and sandwich panels, which are made from a steel skeleton on which prefabricated panels are installed.

According to Usine Nouvelle, there are different types of modular construction for different sectors:

Modular constructions for the construction industry are generally modular site bungalows (***), site offices and site trailers; Modular constructions for events are temporary sanitary facilities or prefabricated reception rooms (***); Modular buildings for medical ...

4.2 Prices vary according to the material used

Here's an overview of prices in ****:

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According to Mon Devis, the construction of a modular home costs between **% and **% less than a traditional house: prices per square meter range from €*** to €*,*** (***).

However, prices vary according to the materials used to produce the modular building: concrete, wood or container.

For a container house, the square meter costs between €*** and €***; For a wooden modular home, the square meter costs between €*,*** and €*,***; For a concrete modular home, the price per square meter is €*,***.

4.3 The contribution of robotics and digital technology to the modular construction market

According to IFS, by ****, over **% of modular construction companies will be using *D printing for modular construction, and **% of construction work will be carried out by robots.

We offer a quick overview of the contributions of new technologies to modular construction:

A masonry robot has been created by Construction Robotics (***) to help masons with repetitive tool handling tasks. These new technologies make it possible to increase productivity, reduce the drudgery of creative tasks and reduce the environmental impact of construction by reducing the use of materials such as concrete. In Japan, a country with severe space constraints when constructing buildings, many companies are developing prefabricated manufacturing solutions using advanced robotics. This country is a pioneer in standardized housing construction, and modular construction occupies a significant share of the market. In the USA, robotics-assisted modular construction enables housing to be built to very tight deadlines. This is particularly important in a country with a highly mobile population. The more reliable and competitive assembly of buildings by robotics also makes it possible to construct buildings with specific functions, such as schools, warehouses or even care centers or shelters for the homeless.

These examples point to a bright future for modular construction in ...

4.4 Developing new market segments

Residential modular construction

The Yves Cougnaud company is the symbol of this new trend, with the creation of a ***-room, *,***-square-meter student residence in ****, but also through its construction of collective housing such as EHPAD and social housing. Indeed, the group's objective is to generate ¼ of its sales in residential modular housing, both collective and individual, by ****.

BODARD CONSTRUCTION has created the INOV modular home concept, selling ***,*** square meters per year and nearly *,*** modules.

The design of modular residential buildings is constantly being improved, and often corresponds to trends in traditional real estate. We're seeing the emergence of modular residences featuring plant-based or noble materials at very attractive prices. The ecological arguments intrinsically linked to modular construction are attracting more and more individuals wishing to live in a home that consumes less and is more eco-responsible.

The democratization of modular garden sheds has also been noted. These garden sheds are becoming real outbuildings, and modular technologies are providing greater comfort at a reasonable price.

in Bristol, in ****, Go Modular Technologies innovated by inserting prefabricated housing into an old building. This technique could be developed on a large scale, as it is inexpensive (***) and requires far less work than rebuilding the entire ...

4.5 Garden studios

Living Garden Studios: An Overview Live-in garden studios are self-contained spaces designed to offer a main room and amenities such as a bathroom and kitchen. They are located in the garden of a property and provide space for a variety of uses, whether as an office, a playroom, a gym or even a self-contained dwelling. These garden studios offer a number of advantages, including a rapid increase in living space, long-term savings thanks to effective insulation, and great flexibility in terms of architectural style. How to build a garden studio? There are several options for building a garden studio. You can call in a professional for a turnkey solution, buy a custom kit for self-build, or use a standard kit supplied by a manufacturer. The choice depends on your DIY skills and preferences. Legislation and regulations The construction of a habitable garden studio is subject to a number of rules and regulations, particularly with regard to building permits. The need for planning permission or a declaration of works depends on the floor area and height of the structure, as well as the geographical area and local regulations. In addition, there may be a planning tax to pay, the amount of which ...

5.1 Current regulations

Modular construction also complies with manufacturing, installation, use, reliability and design standards and certifications:

The ten-year warranty : an insurance scheme governed by the Spinetta law. Under this law, the builder is automatically liable to the owner or purchaser of the building for any damage of a decennial nature that occurs after the building has been handed over, for a period of ** years; Réglementation thermique **** (***) on average, while encouraging technological and industrial development, a high level of energy quality in buildings and a technical and economic balance between the energies used for heating and domestic hot water production; Accessibility of premises: accessibility of the built environment to disabled people, in application of the February **, **** law on equal rights and opportunities; Fire safety of premises: designed to limit the risk of fire, alert occupants in the event of a disaster, facilitate evacuation while avoiding panic, alert emergency services and facilitate their intervention; Electrical standards: NF C**-*** standard regulating low-voltage electrical installations in France. More specifically, it covers the protection of electrical installations and people, as well as the ease of management, use and upgradability of the installation. It covers the design, construction, verification and maintenance of electrical installations supplied at a ...

5.2 Thermal Regulations 2012

Any temporary construction planned for a period of use of more than two years must comply with a standard: the Réglementation Thermique **** or RT****. This regulation came into force on January *, ****, and orders compliance with energy consumption and performance criteria. Modular constructions whose planned use exceeds two years therefore fall within the scope of this law as the law applies " to all new buildings or parts of buildings heated or cooled to ensure occupant comfort. "

RT**** is based on a number of key points that must be met thanks to a study carried out by a thermal design office. The results of this study must comply with RT****, and the conclusions must be provided when applying for a building permit.

There are * main points to bear in mind:

Bioclimatic need (***):

The Bbio characterizes the energy requirements of the building's design components (***). To comply with regulations, your project's Bbio must be lower than the Bbiomax defined by the Thermal Regulations. The building permit is validated if Bbio project < Bbio max RT ****.

The Bbio of a project is calculated according to the following formula: Bbio = * x Heating Requirement + * x Cooling Requirement + * x Lighting Requirement

Primary Energy Consumption (***):

RT**** defines a maximum overall ...

6.1 Segmentation

• Cougnaud Groupe
• Algeco Scotsman
• OBM Construction
• Portakabin (Shepherd Group)
• Dassé Constructeur
• Loxam
• Kiloutou
• GreenKub
• GSCM (Solfab Construction Modulaire groupe)
• Le Goupil industrie
• Pro Contain (Alho Groupe)
• Bodard Construction Modulaire (Groupe GSCM)
• Courant Construction
• Module Création
• Locas MS
• Mobile Home IRM (Trigano groupe)
• Thevenin SA
• Locabri
• Manufacture des Usines Réunies