Becoming a “housing trading house”: splitting the company by function (1974)

What the round trip of splitting off and taking back really meant

Read this functional split as mere subsidiary-making and the whole picture escapes. What Tsuboi announced almost as soon as he took office was a challenge to the way the property trade earned its money at all — buy land, wait for it to appreciate — and an attempt to put a “trading-house function,” which carves out specialist capabilities and then bundles other companies’ capital and technology, at the centre of the firm. Where Edo Hideo’s aggressive style found a way through by manufacturing land, Tsuboi’s move beyond land ownership looked for a way through by thinning the dependence on land; the difference between two generations shows up right there. That the method trailed a reputation for trading on other people’s belts was the flip side of how far it sat outside the industry’s common sense at the time.

The design — separate the functions, borrow outside strength — cast a long shadow over how the group has been run ever since. Mitsui Fudosan Construction, Mitsui Home and Mitsui Fudosan Sales were spun out, at times with outside capital, and then in time pulled back in. The 2002 sale of Mitsui Fudosan Construction and the move to take Mitsui Fudosan Sales wholly in-house, and the same for Mitsui Home in 2018, mark the end point of that oscillation. Splitting off and re-absorbing by turns, the group eventually shaped a structure that holds the initiative in central-Tokyo development on a consolidated basis — and the origin of it can be traced to Tsuboi’s three new companies of 1974.