by Lynne Blundell
Favourites: 17 September 2010 – Japan’s leading property developer and largest builder of pre-fabricated sustainable housing, Sekisui House, has for the first time looked outside its own market for new growth – and its sights are firmly set on Australia.
In the past 12 months the company has signed deals with some of Australia’s leading residential development and construction companies that will see the company putting its distinctive sustainability stamp on housing across the country and, in doing so, it will up the ante in the competitive residential construction sector.
Executive director of Sekisui House Australia, Stephen Williams, told The Fifth Estate this week that Sekisui House’s investment in Australia was the first time in its 50 year history that the company had expanded its operations outside of Japan.
“Australia is a core component of Sekisui House’s forward-looking business plan and it also meets the company’s basic criteria for strategic business investment. These include a growing population with stable demand for housing and marked growth in demand, and a market with potential for future economic development.
“There will almost be a revolution over the next 20 years in terms of housing in Australia. There is no doubt to meet housing requirements in Australia and to address the issue of affordability a company like Sekisui House has a great deal to offer,” Williams said.
Pivotal to all aspects of Sekisui House’s activities, said Williams, are its core values of integrity and honesty in all its dealings, sustainability, comfort and safety in design and the emphasis on technology and high quality in construction. This includes a highly efficient method of pre-fabricated construction, which, says Williams, keeps house costs down while retaining high quality and customised design.
“Sekisui House is a recognised global leader in sustainability and has built a reputation for its beautifully designed and award winning eco-friendly houses,” said Williams.
Sekisui’s move into the Australian market follows a protracted period of recession in both the Japanese economy and housing sector since 2008. While there are signs the Japanese housing market is starting to recover, Sekisui House’s chairman and chief executive Isami Wada announced recently in a media statement that Sekisui House Group has begun to focus attention on international markets, where it sees “numerous growth opportunities.”
“We look forward to exploring these markets further as we develop high-quality localised housing solutions around the world,” Isami Wada said.
After Australia, the company has plans to move into the Chinese and Russian housing markets.
Sekisui House to date has invested more than $250 million in Australia. Last year, in what was one of the largest foreign investments in the Australian property markets, the company bought a 75 per cent share in Payce’s development pipeline, (see our earlier story on this.)
The $190 million deal included a majority stake in Payce’s Waterfront development in Homebush in Sydney’s inner west, as well as a 173 hectare site at Ripley Valley near Ipswich in Queensland.
In June this year AV Jennings sold its contract building division to Sekisui for $18.5 million in a deal that will allow the Japanese developer to market developments under the AV Jennings brand.
Then this month Sekisui linked up with Lend Lease in a business alliance that will see the two companies participate in joint housing projects.
Stephen Williams says the company’s focus to date has been on securing land development sites.
“In August this year Sekisui acquired AV Jennings’ contract housing division, which provides the company with a ready platform for the development of the company’s main business activity of home building,” said Williams.
According to Williams, the deal with Lend Lease will provide Sekisui House with access to master-planned communities around Australia, in order to facilitate the growth of the business.
“Under the land alliance with Lend Lease, Sekisui House will have access to Lend Lease’s development sites, estimated at 65,000 lots, for its home building operations.
“As part of the transaction recently announced, Sekisui House has acquired 450 home sites at the master-planned Hyatt Coolum estate on the Sunshine Coast. Sekisui House will also acquire a 50 per cent interest in Lend Lease’s 144 apartment development, ‘Serrata’ at Victoria Harbour in Melbourne,” said Williams.
In Japan the company uses construction company, Sekiwa Construction Group, to build its houses. In Australia Sekisui House will use local contractors to build its houses but the details of these arrangements are yet to be finalised, said Williams.
Strong sustainability record
There is no doubt Sekisui House does have an impressive sustainability record. The company has built over two million homes in Japan since its was established in 1960 and claims to have achieved zero emissions through most of its operating businesses, launching sales of its first zero emissions home at the G8 Summit in Japan in2008.
In the same year it launched commercial sales of carbon neutral homes with its Green First homes series delivering carbon savings of between 60 to 100 per cent. This series now includes houses in steel frame and wood frame as well as low-rise apartment buildings.
In 2000 the company promoted adoption of double-glazed windows as standard installation for detached houses in Japan and in 2003 met next- generation energy saving standards for all detached houses for the first time in the industry.
In June 2005 the company initiated its Action Plan 20, a comprehensive set of initiatives to achieve the commitments of the Kyoto protocol.
“Sekisui has achieved a 44 per cent reduction in residential CO2 emissions for all detached homes, compared to 1990 levels, – well above the 25 per cent reduction target set by the Japanese government,” points out Williams.
The move by this innovative housing specialist into the heart of our residential growth hotspots may see the housing sustainability bar in Australia pushed a little higher. In its own country Sekisui House has pushed hard for greater emphasis on reducing overall Co2 emissions through residential initiatives.
The Japanese government in 2008 took initiatives to stimulate the housing sector during the global financial crisis, along with incentives for sustainability.
These included an unprecedented tax break for housing loans and broader exemptions for capital transfer taxes, reviving subsidies for residential photovoltaic power generation systems (PV systems) and launching a new housing eco-point system.
Sekisui is aiming for carbon neutral houses to become the standard for Japanese housing by 2050 and it has secured orders in Japan to build 371 or its new Green First line of eco-friendly low-rise apartment buildings. One of the selling features of these is the ability for individual units to sell power to utilities, an innovation that came about through the company’s negotiations with electrical supply companies.
The company is also active in sustainable refits for existing housing stock, through its remodelling business, installing PV and fuel cell systems into existing homes.
Having made detached houses its core, the company is now moving into construction of apartments and complete residential developments, a key part of its Australian strategy.
The company is expecting strong demand for its Green First Carbon Neutral house, which has an emphasis on sustainability features and is also more affordable because of the factory production methods and efficient construction method.
According to Williams, this will be the main Sekisui house style available in Australia. The more sustainable Zero Emissions house, which is already commercially available in Japan with 1200 already constructed, will initially be built as a demonstration house in Ipswich.
“The Green First house is the principal one we will be selling in Australia but we expect to have the Zero Emissions display home built in Ripley Valley by November next year,” Williams said.
The first of the Sekisui Green First houses will be constructed at Ripley Valley by November 2011 but the company will be working on AV Jennings houses before that.
A factory has already been established at Ingleburn in western Sydney and another will be built at Ipswich once the necessary volume of construction is established.
“We have committed to establishing a factory in Ipswich. The local Ipswich authorities under Mayor Paul Pisasale have been very supportive of Seksiui’s operations,” said Williams.
The main features of Sekisui’s Green First Carbon Neutral house include:
The Zero Emissions house has zero net CO2 emissions and no building waste. Some of the features in the Japanese version of the house include:
Highly efficient production method
According to Williams, it is Sekisui’s innovations in technology and design, along with its advanced prefabrication construction methods that have made Sekisui House the leading home builder in Japan. When the company was established in 1960 its aims was to meet a growing demand for higher quality but affordable Japanese homes.
The result was factory production, which in the years since then has become technology-driven.
“Sekisui’s precision approach to the construction of homes through its state of the art proprietary MJ [metal joining] construction methods means that homes can be fully customised and at the same time are executed with an absolute attention to detail. This method allows timber products to be joined without the use of nails – almost like a meccano set where the pieces are fitted together, ” Williams said.
While Sekisui is a prefabricated housing specialist they are far removed from standardised kit homes, said Williams, with each house customised for individual customers.
With Sekisui’s method of pre-fabricated manufacture and construction 80 per cent of interiors and exteriors, installation work, and roofing of the houses are constructed at its factories. These finished units are then assembled into the house on site. This, says the company, means its houses have advantages not only in terms of consistency of quality and construction time, but also in terms of environmental impact, with very little construction waste on site.
Production technology includes computerised industrial robots and individual manufacturing lines. The company has also undertaken considerable research into insulation and technology to improve residential indoor air quality such as air circulations systems and low formaldehyde finishing materials. Its insulation exceeds Japan’s “next-generation energy conservation standards” and frames include both timber and steel.
In the Ripley Valley development Sekisui will build enough homes to house 50,000 families over the next 20 years.
South east Queensland is a key hotspot for population growth over the next 20 years and Ripley Valley is one of three new south-east Queensland communities the Queensland government recently announced would be master-planned by the state’s Urban Land Development Authority.
The Queensland government recently announced that the Ripley Valley would be one of three super developments within South East Queensland to cater for population growth.
Sekisui House says the Ripley Valley development will comprise:
Ipswich Council has welcomed the investment by Sekisui in its municipality. The Council’s Deputy Mayor Councillor Victor Attwood, who has managed the Ripley Valley Master Planning Group for the past six years, said in a recent statement that developments such as Ripley Valley will help keep Ipswich affordable and will also ensure environmentally responsible development.
With the Urban Land Development Authority, Sekisui House and AV Jennings and other major landowners working with council, Attwood said Ipswich would see a significant change in the region.
“With a large amount of growth expected it is also important to consider the environment and the impact population growth could have on bushland.
“Under the Enviroplan program, more strategically important bushland will be purchased to conserve native flora and fauna.
“A total of $6 million will be spent over the next financial year to increase the city’s conservation estates and help cut carbon emissions,” Cr Attwood said.
And on the question of whether the company’s house designs and its methods will make a smooth transition to Australia, Stephen Williams has no doubts. He says that along with the enormous demand for housing over the coming decades, there is room for improvement both in Australia’s commitment to carbon emission reduction and in services currently being offered in the housing sector.
“Australia has made significant advances in recent years in its commitment to improving environmentally sustainable housing but in terms of its implementation of the Kyoto protocol and carbon reduction targets there is still more work to be done. In Japan for example the Government has set a 25 per cent reduction target in CO2 emissions from 1990 levels. Sekisui House has already achieved a 44 per cent reduction in CO2 emissions for detached housing,” said Williams.
“Sekisui House believes the market will respond well to its beautiful and well crafted homes. The company believes that there is growth opportunities for improved home designs, as well as improved quality and customer care, for which Sekisui House has won many accolades in Japan and awards. The ability of Sekisui House to deliver on eco-friendly housing will also be another main growth area for the company.”
The Fifth Estate – sustainable property news
“We can’t wait for the future”