Dec. 15 (NBD) -- China's prefabricated building market is projected to hit up to 1.3 trillion yuan (196.6 billion U.S. dollars) over the next four years, a research report released by Guotai Junan Securities shows. 

Opportunities arise

A prefabricated building is a building that is manufactured and constructed by the way of prefabrication. It consists of factory-made components or units that are transported and assembled on-site to form the complete building.

The niche sector has been on the rise since September 2016, when the General Office of the State Council issued the Guiding Opinions on Promoting the Development of Prefabricated Building, saying that more work should be done to increase the proportion of prefabricated buildings in the total number of newly-built buildings to 30 percent over the next decade. 

Upon the release of the policy, cities like Shanghai, Shenzhen, and Wuhai have announced their development goals on this count. 

Of them, Shanghai aims to raise the city's monomer prefabrication rate of prefabricated buildings to more than 40 percent or to increase the assembly rate of such buildings to over 60 percent during the 13th five-year-plan period. 

Recently, the Ministry of Housing and Urban-Rural Development unveiled the list of 30 prefabricated building pilot cities and 195 industrial bases. 

Among the pilot cities are Beijing, Shanghai, Tianjin, Shenyang, Nanjing, Hangzhou, Hefei, Zhengzhou, and Chengdu. 

Photo/VCG

Companies take moves

Seeing the promising future, real estate developers and construction companies are ratcheting up a strong push to expand their presence in the sector. 

China Vanke Co., Ltd. is a pioneer in the prefabrication building industry. 

According to public information, of Vanke's newly-started major property projects last year, over 40 percent have been applying industrialization technologies. 

Another residential community developer Country Garden is also working on a housing industrialization construction system called Standard and Shareable Geospatial Foundation (SSGF). The newly-developed complete array of building solutions is being promoted in property projects in more than 20 provinces and cities, and will be extended to all new projects in the future. 

In addition to property developers, construction firms are also looking to grab a share of the increasingly prosperous segment. 

A leading enterprise in precast concrete construction worldwide, Broad Homes Industrial International Co., Ltd. is teaming up with Poly Real Estate Group Co., Ltd, a large-scale state-owned listed real estate company held by China Poly Group Corporation, to tap deeper into the prefabricated building area. The two parties plan to build a large-scale comprehensive base for building industrialization. 

Not only so, Broad Homes is gearing up its expansion in countries along the route of the Belt and Road Initiative. The company has secured multiple projects in 12 countries, including Russia and Poland. 

Reshuffle brews 

A person-in-charge of Poly Real Estate in Guangdong province told NBD that the development of prefabricated buildings has exerted fundamental influence on architectural structure, and will gradually make a profound impact on the fields like refined decoration, smart home, and smart home appliances. In the aspect of software, this raises new requirements for real estate developer's abilities in informatization, digitalization, and project management. 

Prefabricated building will be an inevitable trend as prefabricating solutions can shorten the construction period and reduce developers' costs, according to a person in charge of engineering technologies at Country Garden. 

Yan Yuejin, research director of the think tank at the E-house China R&D Institute, said to NBD that land acquisition policies and project development regulations in favor of prefabricated buildings will urge real estate firms to enhance R&D in this respect and also help kick out those with less competitive production technologies. This, accordingly, will lead to a change of competitive landscape of the industry. 

However, Liu Ce, chief researcher with the Mingyuan Real Estate Research Institute, held a different view. He said that the introduction of prefabricated building construction systems won't make a significant impact on the competitive pattern, as real estate developers without such building solutions can survive the competition through the cooperation with companies specializing in prefabricated buildings.  

Scale, capital, and strategic planning are what really matter in the industry competition, Liu underscored.  

Email: lansuying@nbd.com.cn