Financial innovation is critical in the real estate sector but operational innovation around real estate is equally if not more important, says Taponeel Mukherjee, head of   Development Tracks, an infrastructure advisory firm.

An innovative operational model in real estate construction that deserves more attention in the Indian context is “prefabricated construction” or offsite construction, he says.

While there are differences between the various types of technologies available for offsite construction, one should primarily be concerned with the cost-benefit analysis of the segment as a whole in the Indian case.

Prefabricated construction very simply mans construction of structures produced in an offsite factory away from the construction site and then assembled on the construction site. Countries like Japan and Sweden have made significant progress in the technology over the years.

Given India’s much-improved trade relations with Japan, collaboration in offsite construction could be hugely beneficial for both nations, Mukherjee said.

India can explore a technology that has the potential to contribute significantly to its real estate sector to gain both economic and environmental benefits. Japanese offsite construction companies would be happy to have access to a large potential market in India.

A study by McGraw-Hill Construction shows  the industries that have seen the most “prefabricated construction” are healthcare, education, manufacturing and warehouses.

Since the construction cycle is shorter than onsite construction, offsite construction additionally leads to a reduction in financing cost of the project, he said.

For India to truly create smart cities, “prefabricated construction” holds the key. In addition, there is a significant reduction in pollution and wastage of resources with the factory production of building components.

He says given the scale required to meet India’s urban housing needs, industrial production of housing deserves critical attention from all especially in the context of affordable housing.

Offsite construction where economically feasible has the capacity to deliver affordable housing at an industrial scale to expedite providing housing to all.

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