Executive Summary
- Toyota Home, a subsidiary of the automotive giant Toyota, has formally entered the rental housing sector with its new brand, T-Maison.
- With a focus on suburban areas in Tokyo, Kanagawa, Saitama, Chiba, and Aichi Prefecture, T-Maison aims to construct 200 rental units annually by 2025, scaling to 400 units by 2030.
- Leveraging Toyota’s proprietary “Unit Construction Method” and production system, T-Maison is setting a high standard for build quality and efficiency in the burgeoning rental housing market.
In a strategic move to diversify its revenue streams and capture a larger share of Japan’s real estate market, Toyota Home (a subsidiary of Toyota) has announced its full-scale entry into the rental housing sector.
Best known for its commitment to single-family dwellings, Toyota Home has launched a new specialized brand named T-Maison to carry the banner of its rental housing initiative.
The company aims to build 200 rental units per year by 2025, with plans to double that number to 400 by 2030.
Japan’s Rental Market: The Untapped Potential
According to the Ministry of Land, Infrastructure, Transport and Tourism’s housing construction statistics, 40% of the new homes built in the fiscal year 2022 were rental units and apartments, amounting to 340,000 homes.
On the other hand, Toyota Home has mainly been constructing standalone houses and condominiums, with 240,000 standalone homes and 140,000 condominiums to its credit.
By venturing into the rental market, the company aims to unlock an untapped market roughly equal in size to its current portfolio.
Why the Pivot to Rentals?
One reason for the shift towards rental housing is the anticipated decrease in demand for home ownership due to Japan’s declining population and the aging society.
Factors such as rising mortgage rates and increased cost of materials have also made home ownership less appealing. However, Toyota Home’s Deputy President, Yokota Sumio, believes that the rental housing market has robust demands.
“The growing number of people who don’t prioritize home buying and the landowners looking for efficient ways to utilize their lands signify a steady market for rentals,” he stated.
The T-Maison Brand: Innovation and Efficiency
Central to the T-Maison brand is the “Unit Construction Method,” in which individual building components are produced in factories and assembled on-site. This method not only speeds up the construction timeline but also maintains a high level of quality and durability.
Toyota Home also integrates the Toyota Production System, which eliminates waste in the manufacturing process, ensuring more efficient and cost-effective construction.
The flagship model under the T-Maison brand is called “Synse,” designed to accommodate around ten households. The focus of this brand isn’t in busy urban centers but rather in suburban areas of Tokyo, Kanagawa, Saitama, Chiba, and Aichi Prefecture.
These five regions together make up 40% of the new houses built in Japan, making them a significant market for the brand.
Affordability and Sustainability
One of the standout features of Synse is its affordability, with construction costs starting from around 700,000 JPY per square meter.
“We are targeting the most affordable price range among the major housing companies,” said Yokota.
Furthermore, the units come with unique features like the ability to charge electric and hybrid vehicles directly from the home, aligning with the increasing shift towards sustainable living.
Expanding Customer Base
To ensure the success of its new venture, Toyota Home plans to increase its corporate sales staff, who will liaise with financial institutions and other Toyota Group companies to introduce prospective clients.
Trust banks, in particular, see an increasing number of consultations from clients seeking advice on whether to use their vacant suburban land for rental apartments or parking lots.
Already, Toyota Home has received several dozen orders for its new rental units, and the projections for 2023 anticipate up to 100 units.
By 2030, the company aims for rental houses to make up more than 10% of its new construction business. Given the higher floor area of rental properties, the profit margins are also expected to be between 20-30%.
