Sekisui House, Ltd.

Business Details

The Detached Housing Business handles design and construction contracting of detached housing, while the Rental Housing & Business-Use Buildings Business handles design and construction contracting of rental housing and business-use buildings. Sekisui House, Ltd. itself and the Sekisui House Construction Group operate as the main companies in these businesses. The company is pursuing improved profitability centered on ZEH, high-value-added products, and area marketing. Note that in the financial results summary these are disclosed as the "Rental Housing & Business-Use Buildings Business," which differs in segment classification from the "Rental Housing Business" and "Condominium Business" disclosed in the securities report.

Recent Overview

Detached housing saw lower revenue and profit, while rental & business-use buildings saw higher revenue and profit—a divergent picture

In Q1 FY2027 (ending March 2027) (February to April 2026), the Detached Housing Business recorded net sales of ¥104,188 million (down 4.3% year on year) and operating income of ¥4,474 million (down 33.2% year on year), resulting in lower revenue and profit. This was affected by a decline in buyer sentiment due to rising mortgage rates and construction costs, although current inquiries have remained generally stable. Meanwhile, the Rental Housing & Business-Use Buildings Business achieved net sales of ¥122,205 million (up 2.1% year on year) and operating income of ¥13,409 million (up 8.8% year on year), resulting in higher revenue and profit. Expanded sales of 3- and 4-story rental housing and Sha Maison ZEH in highly convenient areas centered on S and A areas were successful, improving the operating margin from 10.3% to 11.0%. Order backlogs increased for both businesses compared to the end of the previous fiscal year, maintaining the sales foundation going forward.

Key Products

Growth Drivers

• Support for detached housing orders from government housing acquisition support measures (such as the Child-Rearing Green Housing Support Program)
• Expanded adoption of ZEH (Net Zero Energy House) and sales expansion of high-value-added products (detached housing ZEH ratio of 96%)
• Price leader strategy based on area marketing centered on S and A areas, and maintenance of high occupancy rates and high rents
• Differentiation through achieving an 87% ZEH unit ratio for rental housing and appeal to residents through the resident power-selling model
• Enhanced proposal capability and expanded sales of mid-to-high-end products through the "life knit design" design proposal system and promotion of the SI Business
• Strengthened ESG solutions proposals for corporate and public-sector clients, promoting order acquisition in the non-residential field including ZEB
• Accumulation of order backlog (¥454,693 million, up 9.0% from the end of the previous fiscal year) against the backdrop of a favorable order environment in the Construction & Civil Engineering Business

Risks

• Impact on profitability from rising construction costs (higher material prices and labor costs) (Detached Housing Business operating margin declined from 6.2% to 4.3%)
• Weakening trend in new housing starts for owner-occupied and rental housing due to the continued upward trend in mortgage rates
• Risk of declining orders due to the reaction following the peak of rush demand ahead of revisions to the Building Energy Efficiency Act, etc.
• Risk of further increases in housing material prices due to escalating tensions in the Middle East
• Risk of negative impact on consumer sentiment and reduced willingness to purchase housing due to rising prices and inflation
• Risk to future net sales as order intake declined year on year for both detached housing and rental housing