Temporary Structures: Here for a good time…and a long time

How permanent is the trend of increased investment in temporary structures? In this article, we delve into what a temporary structure is, why the market is growing quickly and what’s driving the sector’s recent influx of investment.

What exactly is a temporary structure?

In the commercial world, a temporary structure, as the name implies, is a structure that is not designed for long-term use. Examples range from stacked storage containers to demountable sporting venues. Different types of temporary structures typically have different use-cases, which can relate to their size, level of ‘finish’ and sophistication:

Figure 1: Temporary Structures Overview

Highly Illustrative & Non-Exhaustive; SOURCE: Fairgrove Research

At the less sophisticated end of the spectrum lie modified shipping containers. Typically manufactured in China, these containers serve as vessels for transporting goods across the globe, but many are subsequently acquired by traders (e.g. Cleveland Containers) once they reach their destination, where they are converted into storage solutions and even garden offices. Typically used to shelter ‘stuff’ as opposed to people, modified containers find popularity in sectors such as self-storage, plant hire, construction and transport & logistics, where users prioritise practicality and price over aesthetics. However, there are notable exceptions to this rule-of-thumb, as exemplified by BoxPark in Shoreditch, where containers have been used to create a unique retail and hospitality environment. While there is some scope for differentiation in flooring, lighting, ventilation, glazing and security, the container trading market remains highly fragmented, with products largely still commoditized. As such, competition primarily centres on pricing, availability of stock, delivery speed, and performance in digital marketing to drive sales.

Modular buildings offer a notable aesthetic improvement over containers. These lego-like structures which piece together to form larger buildings are frequently used as temporary classrooms and offices. Despite this, their general lack of customisation means that this market too is relatively fragmented and price-sensitive. Similar dynamics apply to the local and regional marquee market, which caters to smaller events such as weddings, parties, festivals and grass-roots sporting events. The size of this market is substantial, due to the frequent occurrence of these events, and the competitive landscape is broad, containing thousands of small players.

In contrast, the competitive landscape for large non-event structures is significantly more consolidated, with approximately ten key players possessing the stockpiles and experience to efficiently execute larger projects within tight timelines. While opportunities for product differentiation are still somewhat limited, certain players have successfully distinguished themselves through innovative designs capable of accommodating heavier loads or reaching greater heights. Moreover, companies in this category tend to form partnerships with providers of complementary services, enabling them to provide comprehensive fitout solutions, including lighting and flooring, for these structures. This capability sets them apart from smaller competitors, who may lack the resources and expertise required to deliver certain projects. Applications for these structures include solutions for temporary warehousing, retail, agriculture, and increasingly the public sector.

Lastly, the blue ribband sporting, cultural and music events market can be split into three main segments: structures, seating, and staging. This market is far more consolidated, and features several well-established players, including international giants GL Events and Arena. Given their criticality of on-time delivery, larger events (such as the Olympics) maintain long-standing relationships with structure providers, who have amassed impressive track records in their field. While there is a requirement for commodity overlay, these events may also demand highly-customised structures (for example, an Olympic velodrome), with only a select few providers possessing the design expertise necessary to meet the exacting requirements. ES Global is the leader in this niche, working with architects and engineers to provide beautiful, iconic venues, which in some cases, even comply with local requirements to withstand seismic tremors and typhoons.

Temporary growth over Covid or sustained, long-term trend?

What benefits do temporary structures have over permanent ones and how has this led to growth in the market?

The temporary nature of these structures provides the largest advantage to users; they afford users a level of flexibility that permanent structures do not as they can be erected at short notice and dismantled with relative ease. Among other factors, they provide substantial cost advantages over permanent structures, and are a more sustainable option versus new-build.

Figure 2: Benefits of Temporary Structures

Non-Exhaustive; SOURCE: Fairgrove Research

These benefits, coupled with the sudden surge in demand for storage space in both the domestic and commercial sectors, played a pivotal role in the remarkable growth witnessed by the non-events temporary structures market during the Covid-19 pandemic. Notably, the demand for self-storage space, which represents the largest end-market for containers, has historically outstripped supply, with the availability of suitable sites for self-storage providers often acting as a limiting factor.

Lockdown measures implemented during the pandemic exacerbated the need for additional space, particularly among residential customers, further intensifying the demand for self-storage solutions. Simultaneously, many businesses, faced with a slowdown in economic activity and an excess of inventory, also sought more storage space to accommodate their needs. (Some UK businesses had already been stockpiling inventory and spare parts in anticipation of supply chain disruption caused by Brexit.)  Most significantly, the rapid pandemic-driven growth in e-commerce drove an increase in demand for warehousing space, the largest end-market for the large non-events structure market.

So, is this growth just a Covid bubble which is destined to burst?

While the market normalised in 2023, Covid caused a fundamental behavioural change in commercial attitudes towards storage and has also led to increased awareness of temporary structures generally. The Nightingale hospitals, drive-through testing centres, and temporary morgues that appeared during the pandemic have subsequently encouraged new use-cases, such as film and TV studios, military training facilities, and – following the recent concrete-in-schools scandal – temporary classrooms. (It is a sad truism of this emerging market that bad news is often good for business). Lockdowns created a backlog and renewed appetite for live events, while e-commerce activity remains a key driver of temporary or semi-permanent warehousing demand, underpinning growth in the market.

Investment Opportunities & Theses: How to grow a temporary structures provider

Unsurprisingly, these favourable market conditions have attracted a wave of investment into the sector.

Figure 3: Selected Transactions in the Temporary Structure Sector (* indicates deals that Fairgrove advised on)

TargetDescriptionAcquirer (PE-Backer)Date of Investment
Mar-Key Group*Events & Non-Events StructuresAlcuinNovember 2023
Premier Modular GroupModular BuildingsMML Capital PartnersAugust 2023
Smart-Space* (NB: Fairgrove advised an underbidder)Large Non-Events StructuresLauraluAugust 2023
VeldemanLarge Events & Non-Events StructuresIK PartnersMarch 2023
Star Live*Turnkey production agency, specialising in large event structures, seating and staging.LDCJune 2023
Cleveland Containers*Shipping Containers TraderLDCJune 2022
Modulaire Group (Algeco)Modular BuildingsBrookfield Business PartnersJune 2021
Modular SystemConverted Shipping Containers & Modular BuildingsEnterprise InvestorsJune 2021
ES Global*Architectural and iconic sporting, cultural and commercial venuesFlywheel PartnersMarch 2021
ParmacoModular BuildingsPartners GroupFebruary 2021
SpantechModular BuildingsM80January 2020
De BoerLarge Non-Events StructuresLosberger (Gilde Buyout Partners – now Rivean Capital)May 2017
PentalverShipping Containers Trader
G&W (Brookfield Infrastructure Partners)
March 2017
Mr BoxShipping Containers Trader & Modular BuildingsMobile MiniDecember 2016
Non-Exhaustive; SOURCE: Fairgrove Research

Trade players and private equity firms have made multiple investments into temporary structures companies in recent years, with Fairgrove advising on five of these in the last 2 years.

Investment theses centre around three main themes: 1) making bolt-on acquisitions to broaden service offering 2) geographical expansion and 3) share gain via consolidation in somewhat fragmented markets. This occurs alongside organic growth, which can be reasonably high given the nascency of particular segments of the market.

GL Events, an industry behemoth, has pursued all three objectives with an extensive acquisition programme over several years. This has enabled GL to build a truly global proposition and a one-stop-shop for customers; it’s structures are typically delivered alongside a full fitout (e.g., lighting, furniture and HVAC). Furthermore, it has allowed GL to operate across both the Events and Non-Events segments which offers several advantages.

The events industry is known for its seasonal nature, with peak and off-peak seasons. Companies operating exclusively in one segment may need to rely on subcontracted labour during peak seasons, which can result in variable quality of work. By utilising the same staff to serve the non-events segment during quieter event months, companies can maintain higher employee utilisation and ensure a more reliable quality of delivery. Moreover, operating across multiple geographies within the Events segment (such as Europe and the Middle East, which have opposing event calendars), can provide a more even distribution of annual revenue.

Figure 4: GL Events Subsidiaries

Highly Illustrative & Non-Exhaustive; SOURCE: Fairgrove Research

With rising awareness, proven uses-cases and favourable market drivers, it appears the temporary structures market is here for the long-term.

Our Experience

If you would like to discuss this article or are considering growth or investment in the temporary structures and events markets, please contact Patrick Woodrow or Nikhil Chavda.

Photo: Shutterstock