Investor Relations

Construction

Sumitomo Realty’s Strengths

Remodeling

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.

 

Custom homes

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.

Shinchiku Sokkurisan

  • Sales engineer system: Most of our sales personnel have engineering qualifications.
  • Carpenters: We use carpenters who work exclusively for Sumitomo Realty.
  • Fixed price: We provide the customer with a fixed price per unit of floor area, so there are no concerns about additional construction charges.
  • No need for temporary moves: We remodel homes while the customers continue to live in them, which is a major advantage.
  • Earthquake resistance: We incorporate earthquake-resistance strengthening measures based on a computerized analysis of the home as well as measures to prevent damage from termites and moisture.

Custom Homes

  • Advanced performance: Our original Power Column Method makes these homes 1.3 times more earthquake resistant than conventional two-by-four homes.
  • Fixed price: We have an easily understood pricing system, and the use of original materials and large-volume procurement enables us to achieve price reductions.
  • Complete after-sales support: Our homes are backed by a 30-year guarantee and our specialists conduct periodic inspections.

Overview of the Fiscal Year

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.

Outlook

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%.

Construction