Focused on “co-creating value for individuals, communities, and people's lifestyles” and specializing in prefabricated buildings, the Daiwa House Group is expanding its operations in Japan across a wide array of business fields, including the creation of Smart Towns, rental housing, stores, and logistics facilities, as well as providing eco-friendly buildings. Naotake Ohno, President and COO of Daiwa House, explains the company’s modus operandi and the potential overseas for its high quality premises.
Daiwa House was founded more than 60 years ago, and has today become globally recognized for its high quality, sustainability and long-term vision. What do you believe are the key drivers have been behind your success?
Our founder Nobuo Ishibashi founded his business out of a desire to be of service others. Of course, the way in which we service others changes with the times.
Daiwa House was founded during the period of rapid population growth in Japan. To provide high-quality housing to the rapidly growing population, Ishibashi worked to popularize prefabricated housing. Today, we have 10 factories throughout Japan. Manufacturing each component in a factory enables us to stably ensure quality. We have been adding elements related to environmental conservation recently and the same could be said of our rental housing business.
With single-family housing and more recently with rental housing, we are enhancing our efforts related to security. Today, for the locks in rental housing we offer card-based keyless entry systems. We also apply highly durable, break-resistant glass in the windows. In some cases, home theft break-ins occur by smashing the windowpane from the outside to gain access to the inside of the property, but these windows make such activity difficult to accomplish. In the event that a threatening event does occur, security services will arrive at the home immediately. For the rental properties we provide, we have the residents sign a contract with a security company before occupation of the apartments.
We also are seeing an increase in females living alone. We are addressing their needs by using face-to-face kitchen designs and full-body mirrors.
We also incorporate solar power generation and meet energy conservation standards as part of our commitment to the environmental conservation.
What importance do you place on green technology, solar energy and long-term sustainability?
In the housing segment, we started our Smart Town initiative in 2013. Already we have developed Smart Towns in 16 locations, representing 1,000 units. An additional three locations with a total of 300 units are under consideration. These units feature solar power generation, storage cells, and HEMS (home energy management systems) to manage these systems. The specific design of each Smart Town differs place to place, and at some locations we include designs to incorporate natural ventilation and in some areas we provide electric vehicles for car sharing.
The buildings feature the use of insulation that keeps the home warm in the winter and designs that eliminate the influence of external temperatures during the summer.
For the rental housing, the balance between costs and rent should be considered. We add in features such as solar power panels in order to make a difference where possible. This same approach is taken with our business facilities and commercial facilities.
Speaking about the implementation of sustainability, like solar power, HEMS, I know you have operations in the United States as well. Do you take the same approach to building there as well?
Our business in America is based on a partnership and we are currently holding discussions.
What is the importance of the U.S. market to the long-term growth of Daiwa House?
I think our overseas business will come to be centered on the U.S. Currently, our operations in this country are focused on the rental housing business, but in the future we also want to expand into single-family housing, logistics facilities, commercial facilities (shopping centers, retail shops), hotels, etc. However, at present we are extremely busy just dealing with operations in Japan. Therefore, we want to start out with familiar fields and eventually expand operations in the U.S. with a team that is capable of succeeding in all these fields.
So when this time comes, what strategies will you have in place to break further into the U.S. market?
I always explain to American investors that we believe the quality of Japanese housing is extremely high. Needless to say there are very attractive things about American housing. We want to infuse those aspects with all the great elements of Japanese housing to proactively appeal the strengths of Made in Japan.
When you say you have partnerships in the United States, how did you establish those working relationships?
Introductions to partners, gradually conducting business transactions and building new trust-based relationships. At present, we only have limited numbers of partners, but there might be a need to increase our partners depending on which business scheme and areas we aim to expand. It might take some time since we want to increase our understanding of various elements, including interpersonal networking, customs, laws, and the people living in the area.
You said that 60 years is a short time for your company, if we can magically go forward another 60 years, what would you like us to see about Daiwa House?
Daiwa House adopts a philosophy of being a group that co-creates value for individuals, communities, and people's lifestyles. We want to be a comprehensive team that is successful on both the upstream and the downstream.
We also want to expand globally. I think the U.S. will be the focus of this expansion. I believe the U.S. will grow to become a vital country for us.