Japan's population has been falling and the number of households will likely peak around the year 2020.
The housing industry is most affected by the decline in population and the number of households. As a decline is expected in new housing starts, the conventional business structure of the market needs to be shifted to a form that can deal with remodeling and distribution of existing houses. In addition, launching businesses in the markets in Asia and emerging countries is also an important issue as demand is expected to expand in these countries in contrast to the Japanese market.
Due to the "market industrialization" where the market fluctuates in a cyclical fashion along with maturity of domestic economy and society, the real estate industry has more diverse and complex investment schemes and market players. For the real estate industry, enhancing real estate value through maintenance and management has never been more important, in addition to the conventional investment in new real estate. It is also necessary to take on the challenge of global expansion, utilizing the world's best construction techniques in Japan and urban development expertise.
NRI has been gaining thorough understanding of the industry structure and business practices unique to Japan to accumulate extensive consulting experience. We offer a wide range of support from company-wide strategies that ensure a winning pattern to respond to the changing environment, from recombination of portfolios and individual business strategies to the planning and execution of new businesses.
Overseas expansion of housing and real estate companies
As the domestic market is weakening, capturing growth of overseas markets centered on Asia has become an important issue to continue to improve corporate values. In particular, the housing and real estate businesses are strongly affected by the local climate, culture, law and regulations, industry structure and business practices. Therefore, understanding in the characteristics of the business environment in the target market is necessary when expanding business in overseas. Partnership with local companies is also essential.
NRI supports clients in various business stages in cooperation with overseas business locations with a central base in Asia, including analysis on business environment of target markets, selection of alliance partners and negotiation with them.
Structural Reform of Domestic Business
Companies in the housing and real estate industry are faced with the necessity of reforming business structures and portfolios for its domestic businesses in order to resolve the business structure that is dependent on new housing starts and to respond to the changes in the real estate business resulting from the market industrialization.
However, it is not easy to overcome the business model that has long been used. The structural reform can be difficult because the housing and real estate businesses in particular have a large profit per one opportunity or project, and the management structure and framework have already matured.
NRI supports group restructuring, organizational reform, sales reform, business reform, and system development in order to make sure efficient business operations are associated with strategy alternation. We not only support organizational structure and system development but also provide services to establish new organizations, to systems in place, and to foster the next generation management and other human resources.
Development of new businesses in the housing and real estate industries / Entry of other industries into the housing and real estate industries
As the domestic market is weakening, development of new businesses is one of the big challenges. An increasing number of companies launch new businesses in cooperation with other industries, such as the energy sector and the ICT sector. On the other hand, an increasing number of companies from other industries such as energy, ICT, electrical, and automobile are also entering the housing and real estate markets.
NRI provides a wide range of support in new business development including planning and implementation of new businesses and concepts, and business alliance with players from other industries.