Façade sector to get boost on rising income, higher aspirations

As emerging economies give greater opportunities to earn and spend, aspirational spending has become a common spectacle. The phenomenon is increasingly evident in improvement of aesthetics be it residential homes or Commercial structures apart from general spending on luxury.

A notable change is visible in the architecture of buildings across cities. Not just in Tier I and Tier II cities but even in Tier III cities. People are paying closer attention towards the look and feel of the buildings and spending staggering amount to make the environment cozy for their employees as well.

Façade, an outer glass cover on buildings giving them shape, size and security, is one such material that is helping change the paradigm of building architecture.

According to Grand View Research the global facade market was valued at $205.89 billion or (Rs 14 lakh crore) in 2018. The sector is poised to grow at a compounded rate of 7.6% from 2019 to 2025 led by construction-related activities. The growth will be further led by new technological innovations that are leading to development of energy saving facade materials. These advanced products absorb solar energy and find a widespread adoption in several commercial and residential buildings as a secondary source of electricity generation.

At the same time Indian market is pegged at Rs 15,000 crore with expected annual growth rate of 20%  between 2019 and 2025. This growth can be attributed to rising customer spending power along with the need to provide a secure work environment to employees, ANAROCK Property Consultants said in a report. Furthermore, use of metal composite materials offer a durable, harmonious, and modern appearance to the buildings. Increasing usage of such composite materials to build facades is projected to provide an up thrust to the market over the coming years.

Experts believe, the quest for creating iconic office structures plays heavily on façades to create a modern aesthetic philosophy. This
quest brings with it a real danger of ignoring the environmental prerogatives of sustainable development.

Santhosh Kumar, Vice Chairman - ANAROCK Property Consultants says, “Rapid real estate and infrastructure development in India directly impact the demand for façade and fenestration products, particularly in office spaces. Our cities are going increasingly vertical, and vertical development created heat islands which environmentally unfriendly products exacerbate. Moreover, eco-friendly façade and fenestration products promote officegoers' wellbeing and productivity.”

Value segments for façade and fenestration industry

The rising middle-class population in India has created a market for the façade and fenestration products, offering new opportunities for growth at present. It is observed that commercial and office spaces and green rated buildings have used certified fenestration products with high performance.

With the focus on green buildings, IT and corporate buildings are expected to push volumes of Aluminium facades and fenestration products. With price bands of more than Rs 7,000 per Sq mtr on the higher side the demand for new efficient facades too will increase the value of markets by over Rs 2,000 crore, says the report by ABK Consulting

Off late the demand for products is much higher in the Tier 2 and 3 cities than the metros. The economic depression in 2008 forced builders and developers to move towards suburbs to offer low-cost housing, which saw a fall in prices and specifications and this continued for the next 4-5 years. Better connectivity of these towns and cities has greatly helped the façade and fenestration industry to reach out to the hinterland in India.

The commercial segment witnessed a significant facades demand over 2015-18. The availability of raw materials in abundance, such as aluminium, is anticipated to lower the product price over 2019-25. In addition to these market drivers, the development of solar panels that provide usable electric energy and its integration in the building skin is also anticipated to catalyse the industry growth over the forecast period.

Increasing number of new buildings has also catapulted the product demand. According to Grand View Research, Asia Pacific region dominated the industry and accounted for over 30 percent of the global share in 2015, which is expected to grow considerably over the next eight years, mainly due to the notable growth in the commercial and residential real estate sectors

The key companies operating in the market include Permasteelisa Group, Enclos Corp., Harmon Inc., Walters & Wolf, and SEPA, who focus on R&D spending to develop composite materials used for protecting buildings from natural as well as human instigated disasters.

Product Insights

Ventilated facades are likely to be the most prominent product type during the forecast period. Among the ventilated type, curtain walls are poised to be the fastest growing sub-segment, owing to their increasing penetration in commercial buildings. They mainly comprise glass materials that can transmit heat to provide a warm atmosphere in regions with low temperature. As a result, they are also projected to gain a high demand in residential applications in the near future.

The market, at present, is dominated by classic designs, which are anticipated to be replaced by modern, eco-friendly designs over the coming years. Ease of raw material availability and strong demand in the end-use sector, including the commercial and industrial sectors, owing to recovery of the global economy, is estimated to unfold opportunities for industry players over the forecast period.

Major innovations in composite material development are leading to overcoming of several limitations of excess heat and soundproofing. Several basic materials used in the development of the product include aluminum, plastic & fiber, glass, ceramic, and steel. Aluminum and glass-based composite materials are widely used to build facades, owing to their low weight and high transparency respectively.

Aluminum and glass are highly preferred due to their durable and elastic properties. This allows designers to provide a proper shape and size to facades. Investments in Research & Development have also led to development of eco-friendly or sustainable bio-climatic “second-skin facades” to make use of environment for building lighting, heating, and cooling.

Challenges:

The major component of façade is glass. It is believed buildings with high proportion of glass get overheated, pushing up the energy use for keeping it cool. This is unsuitable for the tropical climate of India. Unlike cold countries, we need to control heat gain. In addition we have to deal with the high glare. Delhi, for example, receives 2,688 hours of sunlight annually as against London that receives only 1,480 hours of sunlight in a year.

Besides, glass is not seen as an environment-friendly material by many environment concious green groups. It consumes high amount of energy right from its manufacturing to transportation and installation. The embodied energy of glass is between 15.9 and 26.2 megajoules per kg; it is 1.06 megajoules/kg for bricks. The embodied energy of glass increases considerably when used as double or triple glazing or when inert gases like argon replace the air gap to further improve performance

Glass also poses safety concerns. In 2011, Mumbai's chief fire officer Uday Tatkare told a leading newspaper that buildings with glass facades are major fire hazards and hindrance in fire fighting. Glass sheets often do not have fire retardant coatings and shatter once the threshold temperature exceeds. There are no standards to regulate the quality of glass used in buildings.

Glass is also expensive when compared with other building material. A square metre of glass costs between Rs 1,200 and Rs 7,000, depending on the technology. A good quality brick wall costs less than Rs 1,000 per sq meter.

Conclusion:

To conclude we can say that the prospects for façade and fenestration industry in the immediate term remains relatively good, although a volatile global economy casts some uncertainty over short term prospects. India is performing relatively well and a steady improvement in the façade and fenestration market in the medium term is anticipated. Grand View Research predicts that the market for residential façade is very competitive and is likely to remain so, though within the next few years they expect capacity and demand to become more balanced as demand from the house building sector continues to expand, resulting in less pressure on supplier prices and profitability.

Based on the comments from all the industry leaders and reports, we can come to an inference that with huge projects announcements from the Government like 100 smart cities, and with the propositions by the Planning Commission to build over 20 million new houses in the next 10 years, the real estate sector in India continues to seek greener pastures. Thus along with Façade, the related segments, including windows & door market will zip past again.

Hits: 451