Daiwa House Group 2008-2010Medium-Term Management Plan
Challenge 2010(2008.4 – 2011.3)
1
1. Positioning of Challenge 2010, the 2nd Medium-Term Management Plan
2. Management Vision
3. Looking Back at the 1st Medium-Term Management Plan• Performance indicators• Basic strategies• Social contributions
4. Analysis of Business Environment• Demographic and household number trends, and housing
construction starts
5. Challenge 2010, the 2nd Medium-Term Management Plan• Basic policies• Realize further growth through closer collaboration within the Group• Nurture new future earnings drivers• Conduct R&D into growing renovation market and nursing care
business, as well as steps to help prevent global warming• Reinforcing our business base
6. Business Strategies
2© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
1. Positioning of Challenge 2010, the 2nd Medium-Term Management Plan
Expanded business scale through closer collaboration
within the Group
Sales: ¥1,700 billion(¥100 billion increase each year)
Ordinary income: ¥100 billion(Ratio: 5.9%)
ROE: 9.0%
Sales: ¥1,850 billion
Operating income: ¥115 billion(Ratio: 6.2%)
ROE: 9.0%
Management integration with three listed subsidiaries (Daiwa Lease, Daiwa Rakuda Industry,
and Daiwa Logistics)Strengthened Group brand
Redesign basic strategic organization unit
Invest more in entry into new business fields
Main Them
esB
usiness TargetsP
rincipal Initiatives
Improve profit structureNurture new future
earnings drivers
3rd2nd Medium-Term Management Plan (FY2008-2010)1st Medium-Term
Management Plan (FY2005-2007)
3© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Group that CoGroup that Co--Creates Value for Individuals, Creates Value for Individuals, Communities and PeopleCommunities and People’’s Lifestyless Lifestyles
2. Management Vision
Achieving continuous growth
Contributing to the communities and society
Helping protect the environment
By expanding our operations in line with social demands for products and services that help protect the environment, we are working to fulfill our commitment to being corporate group
that co-creates value for individuals, communities, and people’s lifestyles, and thereby realize growth in harmony with the needs of society as a whole.
We try to co-create, build on and enhance new value together with our customersin order to realize a fulfilling and enriching society in which people can live.
We will value the ties we have with each and every customer and will build life-long trust with customers as a partner who will share in their joys throughout their lifetime.
Connecting HeartsConnecting Hearts
4© 2008 Daiwa House Industry Co., Ltd. All rights reserved. (FY)0706050402(FY)0706050403
7.5%8.2%ROE Operatingincome
Ordinary income target:ROE target:
Sales growth achieved, but profits remain an issue
3. Looking Back at the 1st Medium-Term Management Plan: Performance Indicators
Sales
61.2
2.0%
営業利益・経常利益・ROE
1,528.9 1,618.4
1,184.51,224.6
1,365.9
1,709.2(¥ billion) (¥ billion)
02 03
Ordinary income
¥100 billion9.0%
¥1,700 billionSales target:
Operating income, ordinary income, and ROE
80.089.1
103.0
2.0%
89.3
74.272.5
41.8
85.6
5© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
3. Looking Back at the 1st Medium-Term Management Plan: Basic Strategies
• Strengthening of corporate governance through management integration with three listed subsidiaries (Daiwa Lease, Daiwa Rakuda Industry, and Daiwa Logistics)
• Hired approx. 4,000 staff members groupwide over a three-year period, 57 employees successfully applied for transfer to new positions by opportunity announcement
• Strengthening of internal control system (establishment of Internal Auditing Office; increasing the number of external auditors; establishment of J-SOX Compliance Office)
• Reorganization of production system (reduction of factories from 13 to 11)• Implementation of more rigorous cost management through establishment of dedicated Cost
Management Office• Cutting housing materials costs through development of more efficient new house models
• Renovation of Group brand image • Consolidation of different single-family house series into the one xevo brand —changing basic
construction method for the first time in a quarter-century• Improvement in satisfaction level of home buyers by expanding after-sales service menu
(percentage of home-buyer customers of Daiwa House who stated in a questionnaire that they were satisfied rose from 89.8% in the second half of 2004 to 93.5% in the second half of 2007)
• Development of new business and services through closer collaboration within the Group (Expansion of menu of services for condominium residents under our D’s Bridge system and our Endless Partnership system; launch of credit card and monthly-contract rental apartment business)
• M&A (Eneserve and Odakyu Construction acquired)• Involvement in industry-academia projects (ELIIY Power, CYBERDYNE)• Investment in overseas real estate development projects (China)
Tasks tackled under 1st Medium-Term Management Plan
Strengthen planning functions of management and management system
Rebuild distribution system
Review production system
Actively invest in future growth
Develop core technologies
Strengthen group ties in business segments
Secure and train personnel
Strategies for strengthening our m
anagement base
Strengthen procurement system
Efficiency boosting strategies
Comprehensive portfolio management
Grow
th strategies
Basic strategies
Upgrading the centripetal force of the Group as a whole to strengthen sound but flexible business structure
6© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Fund-raising initiatives• Employees can join a system for
automatic deduction of charitable contribution from their pay (for personally selected charity targets)
• Company matches contributions of each employee to disaster relief funds
• Company joins the “1% Club”(corporate members donate amount equivalent to 1% of ordinary income)
Repairing wheelchairs at homes for the elderly
Gift of pharmaceuticals to Southeast Asian nations
Supporting broad education syllabus at schools
At-work experience sessions for children at the KidZania theme park
Mt. Fuji Cleanup
An “Eco Workshop” for children
Regional volunteer initiativesMt. Bandai Cleanup
• Releasing sea turtles into Lake Hamana
• Mt. Fuji Cleanup• Mt. Rokko Cleanup• Nagara River Cleanup, others
Acting as principal sponsor of the Osaka Symphoniker (symphony orchestra)
Providing generous financial support for exhibitions of works of art
• The Higashiyama Kaii 100th Anniversary Exhibition
• The Great Hermitage Museum Exhibition
3. Looking Back at the 1st Medium-Term Management Plan:Social Contributions
Environmental protection EducationWelfare
Support for Culture and the Arts
Focusing on the themes of close ties with the local community, employee participation, and interaction with children
7© 2008 Daiwa House Industry Co., Ltd. All rights reserved. 2025 (FY)
Population of Japan (unit: 10,000)
Total (unit = 10,000)
Rental housing (unit = 10,000)
Household numbers (unit = 10,000)
4. Analysis of Business Environment: Demographic and Household Number Trends, and Housing Construction Starts
81819898
117117 109109118 163
146132
7482
535353626268687171
828083
442828353541
4146465064
11,927
12,10512,361
12,55712,693 12,77712,77712,777 12,71812,71812,718
12,54312,54312,543
12,27312,27312,2734,678
4,3904,067
3,798
4,9064,906 5,0145,014
5,0485,048 5,0275,027 4,964
1985 1990 1995 2000 2005 2010 2015 2020
Single-person households
Standard household(Parents & children)
789 9391,123
1,2911,421
1,5161,5161,5161,598 1,666 1,715
1,1991,1991,199
1,5181,5181,518 1,5171,5171,517 1,5031,5031,503 1,4911,4911,491 1,4661,4661,466
1,4161,4161,416 1,3511,3511,351 1,2771,2771,277
Challenge 2010Challenge 2010
Starting right now to build a stronger group structure to ensure continued growth even in FY2011 and beyond, when the business environment is expected to become still more severe
Housing construction starts
(5-year moving annual average)
Housing construction starts
(5-year moving annual average)
Source: Produced by Daiwa House Industry based on data from the Research Institute of Construction and Economy
Demographic and household number
trends
Demographic and household number
trends
Source: National Institute of Population and Social Security Research
Single-family houses + subdivision houses (unit = 10,000)
8© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Realize further growth through closer collaboration
within the Group
Conduct R&D into growing renovation market and nursing care business, as well as steps to help prevent global warming
Reinforcing Our Business Base
Nurture new future earnings drivers
5. Challenge 2010, the 2nd Medium-Term Management Plan: Basic Policies
Raising competitiveness by demarcating business segments of each group companyStrengthening comprehensive real estate business through closer collaboration within the Group
Investing more in development of next-generation businesses such as energy and roboticsEntering overseas markets, particularly in China
Invest management resources, on a priority basis, in development of leading-edge technologiesOffer products and services that are highly effective in helping cut CO2 emissions
Upgrade our risk management and compliance system Reorganize and upgrade human resources development system
9© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
5. Basic Policies: Closer Collaboration within the Group and Delineation of Business Segments
Subdivisions
Contracting
Developm
ent & construction of
condominium
Contracting (H
ome renovation)
Real estate agency services
Developm
ent & construction of rental housing
Managem
ent& operation of rental
housing
Developm
ent & construction of
comm
ercial facilities
Developm
ent & construction of
medical and nursing care facilities
Developm
ent & construction of
logistics and manufacturing facilities
Construction m
aterial logistics services
Construction m
aterials
Hom
e centers
Fitness clubs
Resort hotels
Nursing care facilities
Asset m
anagement
Business hotels
Energy
Golf courses
Condom
inium m
anagement
Rental housing interm
ediation services
Managem
ent& operation of
comm
ercial facilities
Installation, managem
ent & operation
of temporary prefabricated structures
Credit card
Non-life insurance agency
Auto leasing
Lease of office equipment
Current Businesses
8 Business Segments
Single-Family
Houses
Existing Hom
e B
usiness
Condom
iniums
Rental
Housing
Com
mercial
Facilities
Business and C
orporate Facilities
Health and Leisure
Clearly demarcating eight business segments to: Ensure fast decision-making and high-level specialist expertise, and raise competitiveness through unification of value chain and Groupwide sharing of customer bases
Other BusinessesConstruction Support Business/
City Hotels/Overseas Businesses, etc.
Overseas business
Realize further growth throughcloser collaboration within the Group
10© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Realize further growth throughcloser collaboration within the Group
5. Basic Policies: Demarcation of Group Companies’ Business Segments
(Overseas Businesses)Investing in construction of business infrastructures and strengthening our ability to adapt the unique circumstances of each country
(City Hotels, Energy, and Financial Services Businesses)Actively nurturing candidates for future core businesses under the direct supervision of the parent company
DH (Dalian) Administrative Management Consulting Center, Tianjin Jiuhe International Villa, Daiwa House (Suzhou) Real Estate Development
Daiwa Royal, Osaka Marubiru, Daiwa Energy, Eneserve, Daiwa Rakuda Industry, Daiwa Lease, Daiwa House Insurance, Daiwa House Financial, Daiwa House REIT Management
Offering added value to customers and achieving higher management efficiency through provision of services targeting other club members
Daiwa Resort, Daiwa Royal Golf, Nippon Athletic Service, Jukeikai, Shinwa Agency
(Construction Support Business)Creating new service businesses to raise efficiency of construction business
Daiwa Logistics, Yuasa Logitec, Daiwa Rakuda Industry, Royal Home Center, Daiwa Lantec Higashinihon, Daiwa Lantec Nishinihon
Expanding earning opportunities through collaboration between construction and development operationsDaiwa House Industry, Daiwa Lease, Higashi-Fuji
Optimize earnings by the effective linkage of new commercial facility development projects and provision of property management
Daiwa House Industry, Daiwa Lease, Daiwa Unei Kanri, Daiwa Information Service, DH Property One, Daiwa Royal, Daiwa Service
Optimize earnings by the effective linkage of new rental housingdevelopments and provision of management services
Daiwa House Industry, Daiwa Lease, Daiwa Living, Daiwa Estate, Nihon Jyutaku Ryutu, Daiwa Monthly
Creating new profit-generating business through collaboration between the home-renovation and pre-owned house sales businesses
Daiwa House Industry, Daiwa House Renew,Daiwa Service, Nihon Jyutaku Ryutu
Deploying a unified brand strategy across condominium development, sale, and management, as well as development of products and services
Daiwa House Industry, Nihon Jyutaku Ryutu, Daiwa Service
Raising business efficiency across the entire spectrum of the Company’s integrated operational chain from development through sale to after-sales services
Daiwa House Industry
Expected EffectsPrincipal Group CompaniesBusiness Segment
Rental Housing
Single-Family Houses
Existing Home Business
Condominiums
Commercial Facilities
Business and Corporate Facilities
Health & Leisure
Other Businesses
Strengthening competitiveness by establishing strategy implementation units that extend beyond inter-divisional borders
11© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
(23.0)(21.5)(100.0)(77.5)
5.0%5.0%11.0 10.4 220.0209.0
6.2%5.2%115.0 89.1 1,850.01,709.2
5.0%4.4%2.5 1.5 50.034.2
4.3%0.2%3.0 0.1 70.064.8
4.7%3.3%7.0 5.2 150.0156.6
2.2%1.8%8.5 6.7 390.0381.7
9.5%8.9%21.0 18.0 220.0201.3
10.3%9.5%36.0 29.7 350.0311.5
9.8%9.1%49.0 39.0 500.0427.7
FY2010(plan)
FY2007(results)
FY2010(plan)
FY2007(results)
FY2010(plan)
FY2007(results)(¥ billion)
Operating Income Ratio (est.)
Operating income (est.)Sales
ExpansionDriving growth of
comprehensive real estate business
Value RestorationRestructuring of
strategies relating to products, areas,
selling, and others
Nurturing Businesses
Solidifying business base through sales
expansion
5. Basic Policies: Positioning of Individual Business Segments, and Business Targets
Realize further growth throughcloser collaboration within the Group
Total
Eliminations/corporate
Rental Housing
Single-Family Houses
Existing Home Business
Condominiums
Commercial Facilities
Business and Corporate Facilities
Health & Leisure
Other Businesses
12© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Segmentation employed in financial statements
Housing
Commercial Facilities
Resort Hotels & Sports Life
Other Businesses
Other Businesses
Home Centers
Rental Housing
Single-Family Houses
Existing Home Business
Condominiums
Commercial Facilities
Business and Corporate Facilities
Health and Leisure
Other Businesses
Corresponding business segments under our medium-
term management plan
Daiwa Resort, Nippon Athletic Service, Daiwa Royal Golf
Shinwa Agency, Jukeikai
For reference: Relationship between our eight business segments as perour medium-term management plan, and our financial statement segments
13© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Realize further growth throughcloser collaboration within the Group
Development
Renting Out and Management
Management and Operation
Scale of investments in real estate development (Approx. ¥460 billion over 3 years to FY2010)Revenue from sale of developed properties (Approx. ¥230 billion over 3 years to FY2010)
Upgrade our real estate management system Expanding scope of Real Estate Investment Committee
Management and operation fees from (From approx. ¥110.1 billion in FY2007 commercial facilities to approx. ¥160 billion in FY2010)
Management fees from rental housing units (From approx. ¥134.6 billion in FY2007 to approx. ¥ 200 billion in FY2010)
5.Basic Policies: Strengthen the Comprehensive Real Estate Business
Foreseeing a limit to the growth of the construction market, and developing alternative earnings sources to supplement construction contracts;Leveraging the combined capabilities of the Daiwa House Group to strengthen our real estate operations
Royal Parks Shinden Tsukuba Shopping Mall (tentative name)
Business scale of main real estate businesses
14© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Realize further growth throughcloser collaboration within the Group
* Debt balance of approx. ¥225 billion as of March 31, 2008
Fund procurement plan
Investment planned under 2nd medium-
term plan
Investment under 1st medium-term plan
Total investment over next three years seen at approx. ¥580 billion
Operating cash flow230
Debt increase130
Real estate development (incl. equity investments)
460
Capital investment
90
Real estate development*(incl. equity investments)
300
Capital investment
120
Investment recovery150
M&A, alliances, etc. 30
M&A, alliances, etc. 30
Long-term deposited money 70
(¥ billion)
Targets for FY2008-10
(total)
Results for FY2005-07
(total)
Targets for FY2008-10
(total)
5. Basic Policies: Investment Plans
Planning total investment of around ¥580 billion, centered on real estate development,to procure funds while keeping DER at around 0.5
15© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Approx. 100Number of rooms2008Aburatsubo ProjectPrivate Nursing Home
Approx. 73,000㎡Total floor area2008D Project Urayasu DLogistics Center
Approx. 23,000㎡Total floor area2008Fuji Gotenba Industrial ParkFactory
Approx. 125,200㎡Total floor area2008Tsukuba Shopping Mall (tentative)
Shopping CentersApprox. 65,400㎡Total floor area 2008Foleo Otsu-Ichiriyama
Approx. 23,000㎡Total floor area2009BiVi Fujieda (tentative)
Monthly condominiums juxtaposed433Number of units2008Royal Parks Nishiarai I
Monthly condominiums juxtaposed555Number of units2008Royal Parks Tower MinamisenjuRental Condominiums
Commercial facilities juxtaposed329Number of units2008D’ Grafort Osaka N.Y. Tower HIGOBASHI
Osaka governmental housing redevelopment project 681Number of units2010
Senri-Satakedai Private-Sector-Led Housing Project (tentative)
Joint ventureApprox. 150Approx. 180Number of units2009D’ Grafort LAKETOWN IID’ Grafort LAKETOWN III
Condominiums
Approx. 300(* Approx. 2,600)
Approx. 1,000
Approx. 900
*After Period II, commercial facilities & a hotel planned to be juxtaposed
Commercial facilities juxtaposed
Overview
Number of units at Period I(Total number of units)
Number of units
Number of units
Size
2010Dalian: Former Site of Medical UniversityPeriod I
2010Suzhou: Industrial Park
CompletionNameUsage
Dalian: Yihe (Summer Palace) Champs-Elysees 2009
(Overseas)
For reference: Principal projects scheduled under Challenge 2010,the 2nd Medium-Term Management Plan
16© 2008 Daiwa House Industry Co., Ltd. All rights reserved. Underfloor inspection robotsRobot suits
Credit cards
Nurture new future earnings drivers
Energy Businesses• Developing an “Energy Doctor Service” for energy
conservation which utilizes G-Pacs (an energy monitoring system), and expanding sales of energy-saving devices
• Invest further in lithium ion battery businessHigh-efficiency lighting fixtures
5. Basic Policies: Nurture Next-Generation Businesses
Focusing efforts on creation of next-generation businesses to become new earningssources
Financial ServicesCredit card business• Expand annual turnover through promotion of Groupwide
points systemAsset management business• Realize TSE listing of REIT, and expand investment scale
Robot Business• Robot suits• Underfloor inspection robots
The G-Pacs energy monitoring unit
17© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
5. Basic Policies: Strengthen Overseas Businesses
Commencing serviced apartment and office rental projects in Vietnam
• Upgrade market survey and analysis capabilities, based on our Hanoi Office
Increasing capabilities in development of condominiums targeted at wealthy customers in China
• Plans for development of real estate business in six major Chinese coastal-belt cities with high proportion of wealthy individuals – Dalian, Beijing, Tianjin, Suzhou, Shanghai, and Hangzhou
• Improve ability to collect information on land prices, bidding prices, etc. through the expansion of real estate development divisions
Summer Palace Champs-Elysees (Dalian)
Hong Qiao Villa (Shanghai)
Creating necessary business organization• Upgrade Overseas Business Office to Overseas Business Division
Aggressively pursuing real estate development business overseas, particularly in China
Nurture new future earnings drivers
18© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
5. Basic Policies: R&DConduct R&D into growing renovation
market and nursing care business, as well as steps to help prevent global warming
Aggressively investing management resources in development of leading-edge technology
Base technologies developmentEmploy our prefabrication technology to meet the changing needs of society
• Improvements in methods and structures of buildings・・・Labor-saving methods, raising asset values
Leading-edge technology developmentPursue technology development in 4 focus areas with good future growth potential
• Environment- and energy-related technology・・・CO2 emission-reduction technology; resource-conservation technology
• Technology to meet need in existing home business ・・・New know-how to help customers improve their asset values
• Technology to meet needs of aging population (nursing care, etc.)・・・Service robot technology
• ICT and related robotic technologies・・・Next-generation residential computer network
Note: ICT = information & communications technology
The Restore & Rebuild System enables buildings to be easily dismantled and re-erected elsewhere.
Next-generation home computer network, making the home into a communication hub
19© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
5. Basic Policies: Environmental Initiatives
Aiming to achieve a 200% CO2 emission reduction in all business operations and processes, by taking prevention of global warming as a most important theme
Before we aimed to provide products and services enabling customers to reduce CO2emissions in an amount equivalent to our own emissions. Now, we aim to enable them to achieve a 200% CO2 emission reduction compared with our own emissions
• Airtight, strong thermal insulation(Exterior Thermal Ventilation Wall, etc.)
• Generation of power through solar panels
• High-efficiency water heaters, etc.
* 1: Takes into account increases resulting from business expansion and decreases caused by CO2 emission measures* 2: Takes into account product feature upgrades and business expansion
Conduct R&D into growing renovation market and nursing care business, as well as steps to help prevent global warming
The Daiwa House Group’s four priority themes in tackling environmental issues
CO2 emissions in course of
business activities
CO2 emissionreduction through
our products and services
FY2007 (results) FY2010 (targets)
800,000 tons
480,000 tons
1,100,000 tons*2
520,000 tons*1• Energy conservation inspection, improvements in energy use• Introduction of energy generated
from natural sources, etc.
Preventing pollution by
chemical substances
Resource conservation
Preventing global
warming
Ensuring harmony with the natural
environment
20© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Risk Management & Compliance
Human resources
5. Basic Policies: Reinforcing Our Business Base Reinforcing Our Business Base
Upgrading Groupwide structure by positioning risk management, compliance, and human resources development as top management priorities
Widen the scope for job creation to fully develop employee potential
Convert non-regular employees to regular employee status
Take steps to spread use of child-raising support system
Provide varied menu ofcareer tracks
(skill development program)
Staff
Training S
ystemP
ersonnel S
ystem
Facilitating exchange of staff between Group companies
(voluntary job-change systemfor a wider range of Group
employees)
Group legal sections to have staff of 50;Dedicated legal affairs officer assigned
to major business operations
Create Groupwide risk management system
Conduct cross-sector compliance training across the entire Group
Appointment of compliance& risk managers
Implement more thorough compliance education
Expand scope of authority ofRisk Management Committee
Start program to develop next-generation of managers
(Daiwa House Juku, management skill development course)
21© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Overview of Our Business Strategies
Single-Family HousesCondominiumsExisting Home BusinessRental HousingCommercial FacilitiesBusiness and Corporate FacilitiesHealth and LeisureOther Businesses (Construction Support Business, City Hotels)
22© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Develop new marketing channels and focus management resources onselected areas
• Achieve shift from traditional system of marketing based on permanent model house centers to one based on our LABO model houses and our website
• Establish the xevo series as a well-known brand name in the field of long-lasting, high-quality houses
• Strengthen operations in the conurbations of Chubu, Kanto, and Kansai Enhance our Existing Home Business as means of raising the value of customers’ home properties
• Set up customer centers nationwide to promote services such as home rebuilding, home renovation and expansion, and services related to buying and selling pre-owned houses
Improve planning and marketing capabilities in subdivision housing field• Establish Daiwa House as leading brand name in the field of very long-lasting
houses, including housing project landscaping• Create specialist division encompassing both housing project landscaping
planning and land procurement
Reform cost structure to improve earning power• Achieving higher efficiency and greater marketing effectiveness through
amalgamation of Head Office departments and wooden-structure housing division
• Realizing cost reductions in materials, ordering, logistics, and construction through use of our 4M2G Construction Method, rationalizing our selection of construction materials, and reforming our supply chain management system
Value Restoration
xevo E
Note: 4M2G Construction Method = No scaffolding, No onsite welding, No paint, and No caulking, plus exterior Walls with pre-fitted tiles and highly value-added exterior Walls.
6. Business Strategies: Single-Family Houses
They can serve as effective marketing centers in areas where demand for rebuilding of owner-occupied houses is strongAs the model houses are “actual” size, customers can gain a realistic impression of the product being proposed.The model houses are sold off at the end of the limited period, helping to reduce fixed selling costs.
Anticipated benefits from LABO model houses
Narrowing the focus of customer targets by product and creating a cost-cutting business structure in the contracting field;Growing our Existing Home Business, and invest in more advanced marketing and planning capabilities in subdivision housing field
Daiwa House’s LABO model housesThese are model houses that are the same ashouses actually for subdivision sale, and are open
for customer viewing for a limited period.
23© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
6. Business Strategies: Condominiums
Focus on development of major high-rise condominium buildings
• Active involvement in joint-venture projects• Raising proportion of large-scale projects
(from 20% in FY2007 to 35% in FY2010, including joint ventures)• Raising proportion of condominiums located in Japan’s three
major metropolises(from 65% in FY2007 to 75% in FY2010)
• Take aggressive stance on multipurpose development projects including commercial facilities, hotels. etc.
Expand intermediation service businesses for residential sales and rentals
• Increase number of condominiums under management from 58,000 in FY2007 to 73,000 in FY2010
• Strengthen services to existing customers through D’s Bridge asset valuation system. From 120 intermediary contracts involving sale/rental in FY2007, to 280 in FY2010
Continue improving operating income ratio by cutting selling costs
• Achieve further improvement in efficiency through reduction in number of sales offices
• Reexamine existing direct sales system and continue expanding volume of selling through third-party companies
Value Restoration
D’ Grafort Osaka N.Y. Tower HIGOBASHI
D’ Grafort Kiyosumi-shirakawa
Sparkling Tower
D’ Grafort LAKETOWN
Raising operating income ratio through development of large-scale projects, expansion of intermediation service businesses for residential sales and rentals, and cost cutting
24© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
29.1
2.4
6. Business Strategies: Existing Home Business
Expand business by offering renovation work on entire housing originally built by Daiwa House Group companies
• Strengthen and propose marketing of renovation services for condominium and rental apartment buildings in addition to single-family houses
Set up more marketing offices to strengthen capability in intermediary services involving real estate for business purposes
• Open three more offices in Tokyo area (for total of six)Raise sales in Tokyo area as percentage of total from 16% in FY2007 to 30% in FY2010
Expand scale of business in sale of pre-owned houses and condominiums
• Set up dedicated business unit in charge of Tokyo areaRaise sales in Tokyo area as percentage of total from 16% in FY2007 to 35% in FY2010
Nurturing Businesses
Before renovation
After renovation
Sale of pre-owned houses/ condominiums
Real estate agency services
Renovation
FY2007 (results) FY2010 (plan)
Sales breakdown
Extensions
43.0
2.7
3.0
4.0(¥ billion)
Strengthening ability in marketing renovation services to former customers;In the real estate agency business and sale of pre-owned houses and condominiums, we will focus management resources on Tokyo area
25© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Strategy for metropolises and major regional cities• Focus on construction and marketing of medium-to-high-
rise rental housing in metropolises, and of three-story rental buildings in major regional cities
Target large-scale projects• Secure contracts for promising public sector projects
Strengthen capabilities in management of monthly condominiums and develop business models for the holding and operation of buildingsStrengthen real estate rental mediation services
• Set up network of offices around Japan, and expand advertising strategy, particularly on the Internet
Number of housing unit rental contracts extended through our mediation service: from approx. 3,000 in FY2007, to approx. 7,000 in FY2010
Expand scale of business in property management• Acquire more management contracts for rental housing
built by Daiwa House
Raise number of residential units under management from estimated approx. 200,000 in FY2007 to approx. 300,000 in FY2010 0.5 1.0
0.3 6.0
138.4193.0
288.5
300.0
6. Business Strategies: Rental Housing Expansion
Pacific Royal CourtMinato Mirai Ocean Tower
Séjour OTT’s
Construction
Management
Mediation
Monthly condo managementFY2007 (results) FY2010 (plan)
Sales breakdown(¥ billion)
Expanding business scale by entering new markets relatively little business in the past
26© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
6. Business Strategies: Commercial Facilities Expansion
110.0
14.5
130.4
56.6
136.0
20.0
130.0
64.0
Expand business as developer• Focus on small-scale shopping centers of 10,000m2 or less
(neighborhood shopping centers, mini power centers)
Strengthen shopping center management and store operations
• Strengthen capabilities in leasing and planning to attract tenants
• Strengthen facility managementCement strong relationships with owners
• Build stronger relationships with 21,000 landowners• Acquire renovation/rebuilding contracts at the time of
termination of leasing
Aiming to be No. 1 not only in shopping center construction but also in store rentals, as well as shopping center management and store operations
Higashi Sapporo Shopping Center (tentative name)
Foreo Otsu Ichiriyama
FY2007 (results) FY2010 (plan)
Rental property unit management (PM & BM)
Conversion
Construction
Developer
Sales breakdown
(¥ billion)
27© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Expansion
Taking a risk by investing development projects as property owners – mainly for logistics facilities, and acquiring profit as construction contractor and also as developer and operator
Increase profits on development and facility operations mainly through the effective use of REIT
• Strengthen marketing power in operation of distribution centers and nursing care facilities through collaboration with Group companies
• Strengthen marketing capabilities in major regional cities• Improve ability to gather market information from business partners engaged
in development of distribution center networks and business hotel chains, among others
Expand business for leasing offices, logistics facilities, plants, etc.Strengthen capabilities in PFI fields
Private nursing home for the aged PFI project (elementary school)
6. Business Strategies: Business and Corporate Facilities
Multi-Purpose Warehouse Facility
Office Building
28© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
6. Business Strategies: Health and Leisure
Create common advertising platform for all health- and leisure-related businesses
• By linking our wide range of services via advertisements in magazines and websites, we can raise total customer satisfaction, improve the customer relationships enjoyed by the whole Daiwa House Group, and thereby maintain customer loyalty
Use health and leisure operations as introduction for potential customers to the Group’s entire range of businesses
• Improve ease of customer access to our health- and leisure-related services to advertise our housing products and services
Building a common website across various operations (resort hotels, golf, travel, fitness clubs, etc.), and strengthening our Groupwide marketing capabilities
Value Restoration
Okinawa-Zanpamisaki Royal Hotel
Turtle Ace Golf Club (Mie) Sports Club NAS
29© 2008 Daiwa House Industry Co., Ltd. All rights reserved.
Royal Home Center Yoko-oji Store, Kyoto
Increase pace of opening new hotels in Daiwa Roynet Hotel chain
From 10 hotels now to 30 by FY2010
Invest in renovation of Osaka Marubiru
Approx. ¥1.4 billion investment over next three years
6. Business Strategies: Other Businesses Nurturing Businesses
Strengthen our dominance in the home center market; M&A aimed at enhancing logistics services
Strengthen capabilities in provision of comprehensive 3PL services
Strengthen ability in provision of logistics services to other home builders and construction materials suppliers
Upgrade functions of logistics centers
Expanding operational scale through M&A and the launch of new services, while raising competitiveness by building intensive logistics centers
Construction Support City Hotels
Expanding business scale by opening new hotels, and facilitate increased room rates through renovation work
Daiwa Logistics' Logistics Center
Osaka MarubiruDaiwa Roynet Hotel Kanazawa (Ishikawa)
Daiwa Roynet HotelTokyo-Osaki
Disclaimer:All forward-looking statements made in relation to results or business operations provided in this document were current at the time of printing. However, please note that forward-looking statements were prepared based on Company information and may involve potential risks and uncertainties. Therefore, please be aware that actual future conditions may differ greatly from those outlined in the forward-looking statements provided herein, as there are various changeable factors involved.
Top Related