Scaling housing with build‑to‑rent, modular construction and retrofits

Australia is facing a housing crisis, with rising costs and labour shortages making it difficult for developers to scale construction to meet consumer demand.

What’s more, established and older homes are often poorly insulated, with ageing buildings contributing to carbon emissions through intensive heating and cooling.

Built-to-rent advantages

The solution lies partly in taking a long-term view of sustainable housing, according to Rory Hunter, Founder and Chief Executive Officer of MODEL a build-to-rent property platform. Hunter told the CommBank Momentum sustainability conference in Sydney that off-the-plan apartments have traditionally focused on a “short-term horizon”.

“So, while you might be able to drive a return for investors, it comes at a cost to the environment, the end user — either the renter or the owner — and that local community,” said Hunter at the panel discussion on scaling homes and modernising commercial assets for a sustainable future.

The build-to-rent model reframes the design and the feasibility of a project through the lens of value, rather than cost. It “flips the script”, so that the renter becomes a customer “rather than a burden”.

“When you start thinking about them as a customer, it means every single decision you make from a business standpoint is focused on that end user,” he said.

Change on the ground

Modular properties also have a role to play in sustainable housing, said Lester Raikes, Managing Director of Anchor Homes – a leading modular construction company.

“In a factory environment, we’re producing very good-quality homes because we have oversight 100% of the time,” he said.

“We can cut a lot of waste down and we reuse offcuts on other projects.”

Rather than waiting 18 months for a home to be built, as is the case in a traditional build, modular homes can be built in as little as eight weeks in the factory and be erected in as little as four weeks onsite.

To drive wider uptake, it’s essential to educate Australians around what modern prefabricated housing is. “I think we’ve got this perception in our minds, but the reality is a high-quality product and the timeframe — from 18 months to eight-to-12 weeks — is quite transformational,” observed Grant Cairns, Executive General Manager, Business Lending, CommBank.

Von Slater, Chief Executive Officer of Serenitas a national leader in the land lease community sector, noted modular homes have come a long way since their inception, owing to design improvements.

“So for us, as the methods and designs are evolving, it’s presenting as a bit of a solution for the customer,” she said.

JLL’s Head of Sustainable Assets APAC, Julian Sutherland, said the company uses embodied carbon footprinting to model the greenhouse gas emissions generated throughout a building’s entire lifecycle, thereby reducing embodied carbon use by 60%.

“The repositioned asset can have the operational carbon performance of a high-performance, brand-new modern office building, while having 40% of the embodied carbon,” he said. “That’s got to be a good result for the planet.”

“The repositioned asset can have the operational carbon performance of a high-performance, brand-new modern office building, while having 40% of the embodied carbon. That’s got to be a good result for the planet.”
- Julian Sutherland, JLL Head of Sustainable Assets APAC

Does it stack up? The business case for innovation

Retrofitting buildings can add to the value of a property, while improving the carbon footprint, said Sutherland. Once an asset gets to that 40- or 50-year-old mark, it generally needs a refit.

“The whole city has come up around you in a different place. Sometimes, you find the train station that didn’t exist when you built the building is now at the back door, not the front door,” he said.

“So, there’s an opportunity to look at the whole building again.”

The process is not without its challenges, he noted. “They’re big, complicated buildings. But surround yourself with the right people, get the right business plan in place and they’re very successful projects.”

Raikes, meanwhile, said volumetric modular is an “absolute no-brainer” from a commercial perspective.

“It’s just cheaper and a lot quicker, not just because of build time, but because the [traditional] builders in some of these areas are just so busy.

“You have a three-year waiting time before somebody will even start swinging a hammer.”

A call to action

Slater said for modular housing and other innovations to be widely adopted, government incentives were needed.

“Let’s incentivise to get it to scale because when it’s at scale, that’s when businesses like mine and others will adopt it and it will become self-sufficient.”

“Let’s incentivise to get it to scale because when it’s at scale, that’s when businesses like mine and others will adopt it and it will become self-sufficient.”
- Von Slater, CEO, Serenitas

Hunter said businesses need to be bolder.

“Particularly when you think about property and real estate, it’s quite a conservative industry.”

Sutherland echoed the need for boldness, noting most commercial tenants have binding net zero targets for 2030.

“They need high-quality, net zero built assets. And there is nowhere near enough of them,” he said.

“There’s no better time than now to set off on a retrofit, net zero carbon development of existing assets. We have the right skills. We know what we need to do.”