Meet the man bringing Japanese MMC to the UK
When Konishi Kenta arrived in the UK he was struck by the age and condition of much of its housing stock.
“Hundred-year-old buildings and very old, basic infrastructure, which makes it difficult to maintain the quality and the performance level – that is the majority of the market,” says the UK chief executive of Sekisui House, the Japanese group which claims to be the world’s largest housebuilder to use modern methods of construction, having built more than 2.4m houses globally.
“The surprise was the very small amount of newly built houses, with limited choices,” adds Konishi.
When Konishi Kenta arrived in the UK he was struck by the age and condition of much of its housing stock.
“Hundred-year-old buildings and very old, basic infrastructure, which makes it difficult to maintain the quality and the performance level – that is the majority of the market,” says the UK chief executive of Sekisui House, the Japanese group which claims to be the world’s largest housebuilder to use modern methods of construction, having built more than 2.4m houses globally.
“The surprise was the very small amount of newly built houses, with limited choices,” adds Konishi.
Driven by this observation, Konishi and his colleagues have been overseeing a new push from Japan’s largest housebuilder to expand in the UK, starting with a £90m deal earlier this year. But success will rely on scale and as Konishi seeks to import Japan’s MMC model he admits that he faces a “significant hurdle” rewiring British consumers’ perceptions of post-war prefab homes.
“People only talk about ‘prefabs’. We would like to change that perception,” says Konishi. “In the future we would like to have people choosing newly built homes using the MMC approach because of the quality.”
In Japan, MMC is the norm and Sekisui House is the largest provider. Of the 45,000 homes the company sold last year, around a third were made in factories. As demand for new homes rises, Konishi is confident this product will appeal to UK buyers too.
“Every time I come here I see people are more open to new things. We see that in fashion, food, lifestyles. It should happen in housing.”
‘The industrialised house’
In Sekisui’s domestic market, the company benefits from a distinct home-buying process that focuses on choice and customisation.
“Japan has strict planning regulations for residential land,” says Konishi. “People go and buy land and then they choose which home provider to buy from.” Competing housebuilders will set up model homes at showrooms where buyers can peruse the products, with catalogues of ranges with customisable options, allowing them to tailor their homes to their plots.
Sekisui’s Shawood homes range, for example, is designed to complement outdoor spaces, with floor-to-ceiling windows and wooden furnishings. While in Fukuoka, the Seaside Momochi houses use locally produced granite and plants with a focus on enhancing the streetscape.
“We will listen to what kind of house they want and the in-house designer will gather that information,” Konishi says. “There are millions of options that a person can choose from. Every single house is different.”
The various elements of the house are built in a factory and fitted on the site. “Our commitment is to make the house the happiest place in the world,” says Konishi. “The design and precision is perfect. Everything is accurate and the performance and quality of the houses is higher.”
The company has made strides in ensuring its houses are environmentally friendly. Sekisui House’s Green First Zero model uses advanced heat insulation and energy-generating systems, such as photovoltaic solar panels to achieve net-zero energy on 80% of its houses.
Konishi started at Sekisui House in 2002, initially on the design side of the business, creating masterplans and concepts for the research and development team in Tokyo. In 2011, he led the business’s expansion into Singapore, primarily focusing on mixed-use projects, with offices, retail malls and high-rise apartment developments.
It was during this period of international expansion that Konishi became exposed to the UK market. He says Sekisui House began weighing up a move to the UK five years ago. Helped by agents at JLL, the company sought a local partner, selecting Urban Splash in 2017, and sealed the deal to work with the Manchester-based regeneration company in May, taking a 35% stake in its modular housing division.
“I see a similarity between the two countries but there is a cultural difference and a commercial difference,” says Konishi. The new venture seeks to overcome this by combining Sekisui House’s evolved MMC know-how with Urban Splash’s on-the-ground experience in the regions.
“This is coming from what we have done in 60 years of our history,” says Konishi. “That experience back in Japan could be adding value to the efficiency of production and quality of the house.”
A UK splash
It has been a year since Konishi moved his family to St John’s Wood, NW8. He spent the first six months under the radar, ironing out the details of the tripartite agreement with Urban Splash and Homes England, and the past six months integrating platforms.
“In the short to mid-term we will be focusing on how to grow this platform and how to maximise the potential of market opportunities in the housing sector,” says Konishi. In the long term, the focus will be growth: “Scale is one thing we always focus on. That is what we expect in five to 10 years’ time.”
Konishi is reluctant to commit to targets. When Sekisui House announced its UK launch, the vision was to grow from 100 homes to 2,000 homes a year within six years. Now he says only that the goal is “thousands” but will not be pinned down on a specific number. His current to-do list is equally vague. “That’s a secret,” he says when asked what he is currently working on.
The new business has inherited Urban Splash’s development pipeline in the regions and is also bidding on new land. Behind the scenes, there are plans for a second factory and a new product line, but nothing is expected this year.
In the interim, there is also the less-glamorous task of combining technologies and examining the supply chain to identify what can be done in-house versus outsourced suppliers.
Konishi admits that this work means a lot of up-front spending with little clear idea of when the venture will be profitable. But he concedes “the cost is necessary”.
Despite the fervour around MMC and modular housing, major players have yet to reach the scale to overcome the costs of building out a new business. L&G’s modular business, ilke Homes and more continue to report losses as they attempt to establish a new industry. While Homes England is ramping up its investment in modular homes, the government has no plans to financially back MMC development or training.
However, Konishi is hopeful: “There is a good momentum. If this continues in the long term it would be great for us. Continued support from Homes England and the building community to make this happen and make the industry bigger would be welcomed.”
Does this mean buyers might one day head to a UK showroom where MMC rivals wield catalogues of fully customisable homes for their own plots of land? Konishi says right now this is doubtful, but he is nonetheless focusing on the immediate change.
“There are a lot of things can be realised. It is an early chapter of the long journey that this country will have. MMC is not the mainstream, but it has started to happen.”
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