

In 1996, Sumitomo Realty launched the Shinchiku Sokkurisan Full Remodeling Package. This product addresses the concern that remodeling can sometimes be more expensive than rebuilding in Japan due to the risk of cost overruns. With Shinchiku Sokkurisan, a house can be fully remodeled at 50% to 70% of the cost and in half the time required to rebuild it. And because Shinchiku Sokkurisan uses less materials, it is also environmentally friendly. We were the first major real estate company to offer this type of product, and Shinchiku Sokkurisan has been well received in the marketplace. Cumulative sales have surpassed 60,000 units, and we anticipate continued growth in Shinchiku Sokkurisan sales in the years ahead.
In 1995, Sumitomo Realty launched the American Comfort line of highquality,
low-cost Western-style homes in Japan using the know-how
that the Company acquired in building and selling homes constructed
with the two-by-four method in California.
In April 2003, we launched the J·URBAN home design, which combines
the excellent security features of condominiums with the superior
ventilation and lighting of detached houses. J·URBAN has been highly
evaluated in the marketplace and has received a Good Design Award
from the Japan Industrial Design Promotion Organization.
In the March 2011 fiscal year, following the Great East Japan Earthquake
we curtailed our sales activities for Shinchiku Sokkurisan remodeling
operations, and orders declined slightly year on year. However, we
achieved record-high results in both units delivered and revenue from
operations. In custom home operations, the business environment was
challenging, with owner-occupied housing starts remaining at a low
level. Nonetheless, we recorded solid results, with year-on-year gains
in both orders and units delivered.
However, the results of this segment in the fiscal year under review
including those of Sumitomo Fudosan Reform Co., Ltd., were affected
by the fact that the delivery of certain units was delayed until the March
2012 fiscal year on account of the Great East Japan Earthquake.
Due to these factors, revenue from operations rose 3.0%, to ¥162.9
billion, but we did not meet our target for operating income, which was
down 2.2%, to ¥16.7 billion, as we were unable to absorb the marketing
costs spent to strengthen operations.
In both Shinchiku Sokkurisan remodeling operations and custom home operations, we will work to enhance our product lineup by developing new products, and will continue to strengthen our sales and marketing systems. We are targeting gains in both revenue and profit, with revenue from operations of ¥165.0 billion, up 1.3%, and operating income of ¥17.0 billion, up 1.8%.
