The biggest challenges of the real estate industry

Frank Talmon l´Armée

REFIRE: What is SEMODU and what do you do?


Frank Talmon l’Armée: We are the industry leader in modular construction but we have a number of different business lines. We focus on classic modular building and project development, then there are aspects relating to sustainability based on ESG criteria plus the range of topics in the field of digital transformation. Modular building is basically the prefabricated production of ready-to-use cellular rooms which are then assembled on the building site.


Yes, there’s a high level of prefabrication, but that’s the point. We have the method down to a T and we tend to treat every project on more-or-less the same mathematical basis. Irrespective of the project location, we can construct the same building as a number of predefined modules. Our energy concept is a critical factor here. Our aim is to operate carbon-neutral buildings. If possible, we can both heat and cool buildings using electricity alone.

What does SEMODU do that the others don’t?

The wide range of activities. I don’t know of any other company which develops its own projects based on serial and modular construction, which owns an energy company implementing carbon-neutral real estate solutions and which also participates in a company focussing on digital transformation.

What are the challenges facing the construction industry?

The biggest challenge is creating affordable housing. Particularly younger people and families – including my colleagues in Berlin – are finding it difficult to find reasonably priced apartments close to their place of work. A further sticking point is keeping up with and utilising new technologies. Just like what happened in the automotive industry, we need someone in the construction sector to lead the way towards digital transformation. These things always start with a phase of abject denial, but then lots of people will jump on the bandwagon because they need to position themselves behind the forerunners.


But I don’t think the sector will manage this shift on its own. It needs companies to bring disruptive technologies into the market. A further problem is the waste of resources and the high carbon footprint in the industry. We need a sea change towards a recycling-based cradle-to-cradle economy. And finally there’s the issue of productivity, which has been massively increased in other sectors – there’s a world of difference. It’s not so much a problem of the lengthy procedures for obtaining new building permits, but that does play a role. The fact is that as long as you don’t find an alternative means of production, there will be no rise in productivity. The construction industry is doing the same things it did 50 years ago – not much has changed. The building site still looks much the same, with the same machines and skills and manned by people who make long journeys to work every day. The same goes for planning processes. If I develop a new concept, new plans and new construction methods for every building, this involves new teams; a lot of time is wasted and there is no learning curve. Each and every building is practically a prototype.

How is Germany doing compared to other countries? Are we lagging behind?


There are basically two big problems in Germany. One is the different regulatory frameworks across the 16 states and the other is the DIN standards, which have hardly been updated. Anything that is not regulated by DIN guidelines is very difficult to turn into technical progress. If we look at our neighbours, France has far less in the way of regulations and the Netherlands is much more productive because of its proximity to the water, even despite difficult circumstances, because they are actually thinking about serial modular construction and are able to build houses quicker, more efficiently and less expensively.

So does SEMODU have solutions for these problems?

Absolutely. Modular construction makes it possible to radically shorten project and building phases, which significantly reduces the costs for staff and materials. But to leverage the best possible advantage out of this, we need mass production. Just like in the motor vehicle sector, a “permit” would not be for individual buildings as such but for the system modules, and these can then be assembled in different ways to create large numbers of houses. Again as with motor vehicles mass production by robots will take place on large production lines in factories instead of windy and rainswept building sites. This all serves to reduce costs and makes affordable housing possible. It also requires a massive innovation boost within the industry, which is still operating the same way it did 50 years ago.


What are SEMODU’s concepts in terms of sustainability?


There are four main points to consider here: reduce, reuse, relocate and recycle. Our modular concept optimises construction in terms of materials and also in terms of workforce and timing. An important issue is to construct buildings which can be used for different purposes, in case social requirements change over time. This is also an important issue in terms of relocate. If a residential neighbourhood undergoes changes, it is something of an advantage if the building can be disassembled at one place and reassembled somewhere else. This is particularly important in the case of kindergartens, offices and our design for a micro clinic the requirements of the building are basically the same, no matter what the location. The modules are constructed in accordance with the cradle-to-cradle principal to make materials easy to recycle.


What are SEMODU’s ideas for the fight against climate change?


We use wood modules wherever possible and also actively support reafforestation. We are able to achieve carbon neutrality or maybe even a positive CO2 balance. We also support the organisation “1% for the planet”, which has taken up a range of projects in the fight against climate change. As a sustainable company, we want to be a shining example for others to follow this route. We believe that even the smallest projects help to save our planet and all of mankind.


You said the construction sector is like it was 50 years ago – why is change so slow?


All technological advances and innovations are seen as a threat to traditional ways of doing business, although there have been many technical solutions to improve processes such as planning, organisation and even acquisition and sale. There are many individual initiatives under way but not enough to be able to speak of “digital transformation” as yet. We want to help drive this change so that technologies like the internet of things and artificial intelligence become the new state-of-the-art.


What is SEMODU doing to drive the digitalisation process?


We recently bought 360,000,000 shares in the company WANDWALL PLC, which had developed an alldigital building model into which blockchain and AI have been integrated. The company plans a second flotation of 200,000,000 shares targeted at wealthy private individuals in February of next year. These digital walls are a platform and at the same time a new interactive device to unify all functions, which were previously scattered amongst an immense number of different devices.


For example heating, security and lighting can be activated by touch, gestures, speech or apps. Digital walls can also change into wallpapers, art exhibitions and social media walls which are replacing the TV and family photo albums. Horizontal surfaces can be heated, magnetised and even serve as hobs by way of induction.


But that’s not all. On the one hand artificial intelligence means that we can utilise services such as digital assistance, translations, voice-recognition and security surveillance and on the other mechanical learning can analyse and recognise behaviour and prototypes to make living into a real experience. Depending on circumstances and mood, the solution can change the wall colour or play music. Likewise AI can also make suggestions, like YouTube. When I cook dinner, I can get recipe tips based on previous meals or a personal health regime.


Blockchain is usually discussed in connection with crypto currencies, so what use is it in the construction industry?


In terms of the market, it’s possible to transfer and sell properties in the form of tokens. But even at home it would be possible for me to sell services. Blockchain makes the transactions and the issue of tokens absolutely secure. So you don’t have to rely on mutual trust. It all goes much faster without the personal contact.


We are currently working on a white paper to develop a space concept for the implementation of smart contracts based on blockchain. This is particularly helpful if everything is handled online or if outsiders also have access. Blockchain speeds up processes and secures procedures without losing reliability and transparency.