Sekisui House - Company History

Sekisui House began in August 1960 as Sekisui House Sangyo, a $277,778 (¥100m) company spun out of the housing division of Sekisui Chemical, with Sekisui Chemical’s own president, Ueno Jiroo, serving concurrently as its first president. The plan was to industrialise the Japanese house. The problem was that the prefabricated house of the early 1960s cost more than conventional carpentry and looked poorer for the money: sales reached only ¥260m in the year to July 1961 and ¥1.24bn by 1963, while trade commentary of the day named Daiwa House and Eidai Sangyo — not Sekisui — as the fast-growing prefab firms. Three years in, the company carried a cumulative deficit of $250,000 (¥90m), closer to ¥200m once bad assets were counted, and its staff had lost heart.

In June 1963 Tanabe Ken moved across from the executive board of Sekisui Chemical to take the presidency. “This company is a ship about to sink,” he told them. “But I am its captain, and I am prepared to go down with it.” He then made every seconded employee choose — return to Sekisui Chemical, or take the severance and transfer for good — and rebuilt the payroll out of those who stayed.

That October he renamed the company Sekisui House and scrapped the dealer network. Dealers sold houses as a sideline, pushed them without conviction, and rarely understood the building system; from then on Sekisui House employees would do both the selling and the building — direct sales and responsible construction. Rivals avoided the model because it raised selling costs. Alongside it he pushed the product upmarket, launching the two-storey 2D, the economy E and the deluxe F, and it was the F that broke the standing assumption that a prefab house was cheap goods. The company turned an annual profit in 1964, cleared its accumulated deficit and paid its first dividend in 1965, and listed on the second sections of the Tokyo and Osaka exchanges in August 1970, moving up to the first section the following June.

The oil shock of November 1973 cut prefab housing starts from a peak above 200,000 units to about 150,000 by 1975, and the big late entrants — Kanebo, Obayashi Housing — pulled out or retrenched. Sekisui House went the other way and took orders off them. When monetary tightening choked mortgages, it added the industry’s first in-house housing loan to its bank tie-ups, widened its funding from regional and mutual banks down to credit unions, and raised equity at market prices. When material costs exploded, it held its own price increase to 15% against an industry average of 30%, Tanabe overruling the directors who wanted more: “Material prices will settle down soon — we make quite enough at today’s prices.” Cheap, and financeable, the houses sold.

The next constraint was land, so the company manufactured its way around that too. It bought developed sites in bulk from the major developers, sold the land on cheaply, and took the house order on top — the uridate or “sell-then-build” model, against the conventional practice of selling land and house together as a finished package. At the January 1979 year-end it held ¥99.5bn of land, having bought ¥99bn and sold ¥72.5bn in twelve months at a gross margin of 10.1% — a slight loss once the interest on the purchase money was counted, which Tanabe accepted: “If the housing business sells, the company as a whole makes plenty.” Sekiwa Real Estate, set up in Osaka in March 1976 to broker second-hand homes, closed the last gap by feeding trade-up buyers — roughly half of urban demand — back into new orders. In the year to January 1979 sales reached $1.3B (¥304bn) and ordinary profit $90M (¥21bn), a fifteenth consecutive year of rising sales and profit; the profit line passed Taisei and closed on Kajima, and Tanabe declared that “we have got out of being a prefab company and joined the big contractors.”

Underneath sat an organisation built to the same logic. Salesmen were fixed to a territory for years because local carpenters, not prefab makers, held 65% of the market and had to be displaced house by house; branch offices ran logistics, construction and used-home purchasing as regional businesses, growing from 57 to 67 in a single year to the end of 1977, and in 1978 all of them were turned into independent-P&L “companies within the company.” Production was concentrated in three plants of 300 units a month, and purchasing was centralised down to the nails. The range, meanwhile, widened from steel frame into wood, concrete and platform-frame construction and on into ordinary custom houses — the trade called it “a department store of homes” — with the prefabrication ratio per house deliberately cut to buy back freedom of design. That line, from the K type of 1971 through to the Is series of 1984, is what finally changed what a prefab house meant in Japan. Condominiums followed in 1977, urban development after that, and the first ventures abroad — a Dutch acquisition in 1971 that ended in retreat from building into brokerage, and a timber-processing arm in Washington State in 1987.

In the year to January 1991 Sekisui House became the first Japanese housebuilder to pass $7.4B (¥1tn) in sales, and in November 1993 the first to hand over a millionth house; that same year it consolidated its head office into the new Umeda Sky Building in Osaka. Scale brought its own disorder — three design departments competing for products had left 28 separate product names for detached houses alone — and the brands were regrouped by buyer segment rather than price. Then the ground moved: housing starts peaked at 1.63 million in fiscal 1996 and fell without stopping, dropping below a million after fiscal 2008 and reaching only 980,000 even in fiscal 2013, when buyers rushed ahead of a consumption-tax rise.

The reckoning came in the year to January 2010. Sales fell 11% to ¥1,353.1bn and the company posted an operating loss of ¥38.7bn and a net loss of ¥29.2bn, ending the forty-five-year unbroken run of profits that had started in 1964. Gross margin collapsed from 19.2% to 11.6% as write-downs on condominiums and development assets landed on top of the volume decline, and the fixed costs built up through a decade of expansion abroad and into urban development had nothing left to absorb them. The loss lasted exactly one year — sales of ¥1,488.3bn and operating profit of ¥56.3bn followed in the year to January 2011 — but what pulled the company back was not the detached house. It was rental-housing management and remodelling.

So the business was rebuilt around them. The medium-term plan of 2012 named three pillars — built-to-order, stock-type and development-type — and Abe Toshinori was blunt about the alternative: “If we were still a detached-house specialist, as we were a few years ago, we would be shrinking now, and in serious trouble.” Between fiscal 2012 and fiscal 2016 the real-estate fee business grew from ¥393.9bn to ¥469.1bn in sales and ¥17.0bn to ¥31.2bn in segment profit, rental housing profit more than doubled to ¥60.8bn, and international sales tripled to ¥182.1bn on the back of an Australian entry in 2008 and North America Sekisui House in 2010. Consolidated operating profit hit a record ¥184.1bn. A company that had made its money by building a house once and walking away now collected fees for as long as the customer kept it.

In March 2017 Sekisui House bought Woodside Homes, a Utah homebuilder, for about $475.2M (¥53bn). The arithmetic was plain: Japanese starts were stuck in the 900,000s while the United States, with a growing population and a housing shortage, ran above 1.3 million a year — and American detached housing was barely industrialised, which left room to carry across the construction quality control, durable components and design systems Japan had spent fifty years perfecting. Abe Toshinori’s reading of the domestic side pointed the same way: Japan’s carpenters were falling 4–5% a year, from 400,000 then to a projected 140,000–150,000 by 2030, so meeting the same demand would require building 1.5 times as fast. Oregon’s Holt Homes followed in 2021 and Texas’s Chesmar Homes in 2022, widening the footprint from the West into the South.

By fiscal 2023 international sales of ¥511.0bn were 16% of the ¥3,107.2bn group total — six years to move a sixth of the company offshore. Then, in April 2024, Sekisui House paid roughly $4.8B (¥720bn) ($4.94bn) for M.D.C. Holdings of Colorado, acquiring the capacity to hand over some 15,000 homes a year across sixteen states. International sales jumped about 2.5-fold to ¥1,278.5bn in the year to January 2025 — roughly twenty-three times the fiscal 2012 figure — and group sales passed ¥4tn; in 2025 the four American builders were folded into a single Sekisui House U.S.

The same period exposed what the domestic company could not see about itself. In 2017 an organised gang of jimenshi — professional land-title fraudsters — impersonated the owner of a former inn site in Tokyo’s Gotanda district and took ¥6.3bn; the ¥5.5bn loss was under 3% of that year’s operating profit, but the aftermath was not trivial. The investigation report, prepared by four outside auditors and directors, went to the board on 24 January 2018 and never went further than a two-and-a-half-page press release; at that same board meeting chairman Wada Isamu moved to dismiss president Abe, lost the vote, and resigned, whereupon Abe was promoted to chairman. Meanwhile the domestic base kept broadening: the mid-sized general contractor Konoike Gumi, an equity-method affiliate from 2016, was consolidated in October 2019 and contributed ¥269.4bn of sales on a construction cycle unlike housing’s; the Sekiwa property companies were unified as Sekisui House Real Estate in 2020. By fiscal 2023 the stock-related businesses earned ¥128.1bn, close to half of the ¥270.9bn consolidated operating profit.