So what is Unite doing differently? And why is its stock so highly valued? You won't find Unite listed in the construction & building materials section of the Financial Times; it is under real estate. It is not a conventional housebuilder, it is a landlord specialising in student and keyworker accommodation. In fact it has recently become Britain's largest private landlord with 5 000 student rooms under its management.
Unite is no ordinary rent collector because it also builds out virtually all its property and in so doing it has developed an expertise in volumetric building techniques unrivalled in the UK residential scene. While conventional housebuilders are prototyping, Unite has been producing pods by the thousand from its factory in Bristol and installing them throughout the country.
Unite Group is the creation of 31-year old entrepreneur, Nick Porter. He is both chief executive and majority shareholder and remains the driving force behind the company. It began life as a Business Expansion Scheme company in 1991 to provide accommodation for Bristol's student population. Porter recognised this was a growing market but also one fraught with problems for both students and colleges. Everything Unite has done since has been about providing simple one-stop solutions and its success has led to a large number of projects as far afield as Plymouth and Sheffield.
Nick Porter says: "We provide complete facilities management and accommodation services to our higher education and NHS trust clients on a long term basis. It is not only a matter of pride, but also makes good business sense for Unite to maintain standards and provide accommodation to the highest quality."
One way in which it facilitates this is by placing emphasis on product innovation and testing. It has an R&D committee (which Porter chairs) which is continually monitoring the performance of existing developments and looking for improvements. Accommodation provided is generally quite basic and simple but the attention to detail is striking; the company designs much of the furniture in-house and gives rooms such features as solid hardwood desks which can be sanded and resealed each year. Without being overtly green, Unite is building in a basically sustainable way because it is paying such close attention to life-cycle costings.
The drive for quality led Porter to start using volumetric techniques early. The company's build schedules are often driven by academic terms - it is no good having a new student block ready three months late - and factory production was a way of adding both quality to the process and reliability to the timetable. Paul Gaffney was hired to head up this side of the business. He formerly worked with Bryant and is old enough to remember system build in the 1970s. "What we are doing this time around is not so very different but now we spend more and the quality control is much better," he says.
Unite has experienced such growth that it is already onto its second factory, a 55 000 sq ft unit in east Bristol (making it 40% bigger than Beazer's new Torwood 2 unit in Ipswich). Pods are built using Corus Surebuild steel frames and other readily available components. The company keeps the product line simple, though it has recently expanded from three designs to eight. Output is restricted to bathroom units or student rooms with en suite showers. Typical room size is
11 m2 for students and between 13 m2 and 18 m2 for NHS trust workers. Modular construction is the preferred building system though flat packs are used if site conditions demand it.
A recent innovation for Unite is the use of stackable pods for a project in Bristol - previously, Unite has used non-loadbearing structures which either fit in around a steel frame or have concrete poured around them. The stackable pods will be 5.1 m long by 2.4 m wide, constructed using 77 mm deep Surebuild studs lined with Fermacell board for rigidity and sound proofing.
London is a key market for Unite, especially for NHS accommodation, and here it is working in 50:50 joint venture with housing association innovator and modular building prototyper in its own right The Peabody Trust. Peabody Unite chairman Paul Harvard, also finance director of Peabody Trust says: "We were introduced to Unite two years ago originally to help us out with a scheme for nurses accommodation at Barts. We liked the look of each other and decided to make it a permanent arrangement. Despite Peabody being a charity, there is a real synergy between us and it's proving to be a good move. We are impressed by Unite's commitment to quality, reflected by its vertical integration. The fact that we share an interest in volumetric construction is an added bonus."
The go-go growth stock rating afforded to Unite has a great deal to do with its clever positioning as provider of accommodation for students and nurses. Unite has no plans to enter the speculative housing market. But the fact remains that a private company has torn up the rule book and is producing a quality, factory product without any prompting from Egan or the Housing Forum. While many homebuilders remain sceptical about the need to embrace new working methods, the stock market seemingly has few doubts.
Source
Building Homes
