Company history

In September 1978 Suda Tadao, then thirty-two and a native of Kiryu in Gunma, incorporated a company called Yasuragi there with $49,751 (¥10m) of capital. Its stated business was stone: gravestones and building materials, a trade chosen because it sat on top of the local industry the town already had. Nothing about it suggested a national business.

What followed instead was a company that kept swapping out its own core. Yasuragi took a real-estate brokerage licence in December 1988, opened construction and property divisions in January 1989 to sell detached houses, and added a leasing arm in February 1990. Within twelve years of founding it had effectively left the stone trade altogether and restarted as a small provincial property firm. That habit — of having no ancestral business worth protecting — is the single most useful thing to know about Katitas, because it is why the next change in the law read, to this company, as an opportunity rather than a threat.

Japan’s Civil Execution Act was amended in 1996 and took effect in 1998, shortening court-ordered property auctions and making them far more transparent. The practical result was that buyers other than specialist investors could now bid. Yasuragi read the change as a supply line: it opened a sales branch in Kiryu, bought second-hand detached houses cheaply at auction in provincial districts, renovated them and sold them on. The business that would eventually make Katitas the largest firm in its industry was built in Kiryu, twenty years after the company was founded.

What made it durable was not the cheap entry price — that door was open to everyone — but the arithmetic behind it. Auction houses come with occupants to negotiate out and household goods to clear, and the cost of that differs from house to house, so a firm only develops a feel for it by doing many. Yasuragi priced in the aftermath other buyers refused to touch, and the barrier it ended up with lived in accumulated practice, not in the statute.

Then it diversified. A processing centre opened in Midori, Gunma in 2003 and a subsidiary, Property, followed in October; in February 2004 the company listed on the Centrex market of the Nagoya Stock Exchange, and used the platform to launch a debt-collection arm and a mortgage lender that year, plus an insurance mutual and another finance venture in 2006. Property’s income-property sales — tenant buildings and apartment blocks — grew almost eightfold and carried consolidated revenue to a peak of $645.3M (¥76bn) in the year to January 2007. The subprime crisis took it straight back out: income-property earnings vanished, the year to January 2008 brought a net loss, the finance ventures were dissolved or sold off one by one between 2006 and 2012, and by the year to January 2012 revenue was $343.4M (¥27bn) — barely a third of the peak. Suda stepped up to chairman in April 2008 and handed the presidency to Negishi Hiroyuki, an ex-Yamaichi Securities executive who spent his term dismantling what the expansion had built.

In March 2012 a tender offer by Nihon Jutaku Saisei — an acquisition vehicle formed by a private-equity fund in the Advantage Partners group — succeeded, and Yasuragi left the Centrex market that July, eight years after listing. The stated reasons were a depressed small-cap share price and the need for a multi-year rebuild. In January 2013 the arrangement was inverted: the operating company absorbed its own acquirer in a reverse merger, dissolving the vehicle inside the business and leaving a single-purpose company. That July it took the name Katitas — カチ for value, タス for add — putting the proposition of the business into the name itself.

The substance came from the president hired in June 2012. Arai Kensuke, then forty-three, was an outsider: law at the University of Tokyo, Sanwa Bank, Bain & Company, an MBA at Columbia, then housing at Recruit. He was brought in to turn the company around, and he started with sourcing. Auctions were shrinking in number and filling up with bidders, so he moved the main channel to ordinary brokered sales — about 65% — with direct purchases driven by television advertising making up the rest. He also named the customer precisely: provincial households earning between $20,492 (¥2m) and $51,230 (¥5m) a year, roughly nine million of them, a market the big new-build homebuilders were not fighting for. And he reversed the industry’s pricing order, fixing the local selling price first and working backwards through affordable renovation cost and required margin to arrive at what the house could be bought for. One employee carried each property the whole way, from purchase through renovation planning and sale to after-sales complaints.

Profits returned, and then scale. In March 2016 Katitas bought Reprice, a direct competitor, outright; the two unrelated property subsidiaries that came with it were sold within six months. Revenue nearly doubled to $551M (¥62bn) in the year to March 2017. Recognition followed — a renovation award from the Ministry of Economy, Trade and Industry in February 2016, the seventeenth Porter Prize in October 2017 — and so did a stable shareholder: Nitori Holdings signed a capital and business alliance in April 2017 and has held around 34–35% of the shares ever since. In December 2017, five years and four months after being delisted from a start-up market, Katitas relisted directly onto the First Section of the Tokyo Stock Exchange, with revenue of $626.8M (¥69bn) in its first year back.

From $626.8M (¥69bn) in the year to March 2018, revenue reached $865.4M (¥130bn) seven years later — 1.87 times — while operating profit rose faster still, to $95M (¥14bn). The pandemic helped, pulling demand toward roomier suburban houses at rents people were already paying, but the mechanism was simply units sold. Because each house is bought, renovated and sold one at a time by one person, growth means headcount: staff went from 620 to 922 over the same span and average pay rose about a quarter, and management continues to plan expansion in terms of how many more sales people it can add.

Underneath sits a market that grows whether Katitas acts or not. Japan produces roughly 600,000 newly vacant homes a year against a stock of about 8.5 million; houses built during the bubble at some 1.7 million units a year are now passing thirty, precisely as the baby-boom generation’s estates change hands. The 2014 vacant-house law, in force from 2015, slowly turned municipalities from wary of a private buyer into willing partners, opening a further supply channel. Arai has consistently located the barrier to entry not in that legislation but in the idiosyncrasy of individual houses — by 2025 the company put its cumulative experience at some 80,000 properties, which is what tells a buyer what to watch for in a house of a given vintage and material.

The main drag has been tax. For more than five years the company disputed with the National Tax Agency whether consumption tax paid on the houses it buys was deductible; from the year to March 2024 it began booking the difference — around $13.9M (¥2bn) — in selling and administrative expenses, and a Supreme Court defeat in May 2025 made that permanent and part of the base case for the fourth medium-term plan. Even carrying it, the records kept coming: operating profit rose 29.4% in the third quarter of the year to March 2026 on a 20% jump in units sold, full-year guidance was raised from $102.4M (¥16bn) to $112.5M (¥18bn), and the year closed at $960.4M (¥152bn) of revenue and $115.7M (¥18bn) of operating profit. The plan running to March 2028 sets a 20% floor on return on equity, 12% annual operating-profit growth and 10,000 houses a year — the figure Arai first floated in 2019 — with the $126.5M (¥20bn) profit target now expected a year early. The model shaped in Kiryu in 1998 has since had its sourcing rebuilt, its industry consolidated and its listing restored; what it has not had to change is the position itself.