■Business Overview
2. Second-hand housing rehabilitation business
(1) Condominium purchase and resale business
The condominium purchase and resale business is a business where Property Technologies ＜5527＞ buys used condominiums from sellers (owners) through intermediary companies, increases value through renovation, and then resells them. The development brand “FURVAL” provides a service that not only saves time and labor by arranging carefully selected furniture, household appliances, cooking utensils, etc. that match the design, function, size, etc. of the renovation space, but also reduces financial burden by selling (making loans) at prices including furniture and home appliances. Furthermore, limited to home-net purchasers, they also provide an after-sales service “housing security support,” which can be used as many times as for 10 years due to housing equipment failure.
The characteristic of the condominium purchase and resale business is that it is developing businesses by making full use of real networks and technology, targeting primary acquirers in their 30s to 40s in major urban areas of the region from Hokkaido to Okinawa. The advantage of the target group being the primary acquirer group is that needs are clear from the customer's life cycle, such as child growth, and stable actual demand can be expected. Meanwhile, even for primary acquirers, the average price of used condominiums in Tokyo is 56 million yen, while the company is 29 million yen, and there is an advantage in the sense of affordability where the mortgage repayment amount falls below rent even if there is a fixed increase in interest rates during the general borrowing period. Also, although the ratio of the regional area is about 40% for other companies in the same industry, it is also an advantage that the company is as high as 60%. This is because although there is a fact that property density is low and sales efficiency is low in regional areas, competition is moderate despite the increase in properties built 30 years or more, so if a broad sales network like the company is built, it can be used as the main source of revenue through efficient information exchange.
(2) iBuyer business
Some companies that utilize real estate tech are doing business with a transaction form called iBuyer, but it seems that they are often struggling with sales. However, since the company is developing a real estate business, it is expanding the iBuyer business without struggling with sales. The foundation for this is the iBuyer platform “KAITRY (KITRY),” which started in 2021. “KAITRY (KAITRY)” can easily execute complex real estate sales processes online, and where it usually takes 3 months or more from assessment to sale, the assessment can be drastically shortened to a minimum of 5 seconds by AI assessment, and sales (cashing) can also be drastically shortened to a minimum of 3 days by the company purchasing, so it was one of the factors that made the company surpass other companies in the same industry even amid the spread of the novel coronavirus infection (hereinafter, COVID-19). Furthermore, various menus are available, such as sale & leaseback for those who want to sell while living, future purchase guarantees for those who want to buy a new home, and joint investment type sales for those who want to sell at a reasonable price, etc., which supports users' relocation needs.
Due to this new business model, individual psychological hurdles are lowered in real estate sales, and it seems that the relocation market will expand in the future, and the company will move closer to the future where “everyone,” “anytime,” “many times,” and “can easily” change their homes. In order to popularize “KAITRY (KITRY),” the company is utilizing internet advertisements and TV commercials, strengthening the purchasing and closing system, and strengthening infrastructure such as UI/UX. As a result, awareness of “KAITRY (kiteley)” has improved, and the number of purchases has steadily increased every month, leading to an expansion of conversions. Note, there are concerns about conflicts with brokerage companies since the company has embarked on direct sales, but the relocation market itself is expanding due to the company's direct sales, and since the company also supports business efficiency improvements such as brokerage companies DX, etc., the brokerage company also has advantages, so a relationship of trust has been maintained.
(3) SaaS service
While the company's AI assessments and “KAITRY (KITRY)” are achieving remarkable results, technology accumulated by the company was disclosed in response to requests from intermediary companies, etc., and the SaaS service started in 2022. If SaaS products are widely accepted, the target is not limited to more than 33,000 brokerage companies nationwide, and there is a possibility that demand will expand to 0.31 million real estate companies as a whole, 41,500 professional businesses such as lawyers that handle a wide range of real estate-related business, and 1,000 financial institutions. On the other hand, since relationships are strengthened by providing SaaS products, feedback on the company's earnings in the form of property referrals can also be expected. For this reason, they developed and began providing three SaaS products: “KAITRY Finance” for financial institutions, “KAITRY Professional” for professionals, and “HOMENET Pro” for brokerage companies. Note, for “KAITRY Finance” and “KAITRY Professional,” the policy is to rush development in order to capture needs and quickly monetize them, but “HOMENET Pro” anticipates future service expansion and is proceeding with expansion centered around free registration in order to first expand the transaction margin.
Among these, in addition to AI assessment functions (sales price/contract price), “KAITRY finance” for financial institutions can create real estate price research reports to be used in credit management, asset utilization proposals, etc., leading to improved business efficiency and high added value in financial services, so it seems that there is a need for a wide range of financial institutions and multiple departments. For this reason, sales promotion began for financial institutions nationwide, including regional banks, and operation for introduction began as early as 7 banks such as Mizuho Bank. Each bank seems to use it to reduce the trouble of grasping the actual state of loan destination assets in corporate loans, unification of bank standards and elimination of personal attributes, comprehensive proposals that grasp the entire customer assets in private banking in individual operations, expansion of business opportunities in will trust/estate consolidation, enhancement of proposals during refinancing consultations with mortgages, and efficiency of assessment operations for guarantee companies/servicers in debt management. Recently, an “AI assessment by lot number” linked to the “address lot number conversion” function of Zenrin ＜9474＞ was released in order to improve the efficiency of real estate price survey operations at each bank.
In addition to the AI assessment function, “KAITRY Professional” for professionals such as lawyers, tax accountants, and judicial scriveners can create real estate price investigation reports to be used during estate division or property division of real estate. Since objectivity is required in calculating real estate prices by professionals, it was an issue that took time and effort, such as the need to request investigations from multiple real estate companies. However, since “KAITRY PROFESSIONAL” can calculate prices quickly and at low cost and also leads to improved work efficiency, it is suitable for cases where quick resolution such as inheritance or divorce is necessary, and it is expected that introduction will expand in the future. Also, if introduction expansion in the professional industry progresses, it will also become a new purchasing route for the purchase and resale business, and further strengthening of the company's database can be expected. “HOMENET Pro” for brokerage companies is a package of business efficiency improvement tools that the company has built for business use, and can be expected to contribute to improving business efficiency through functions such as AI assessments, proposal preparation, and confirmation of properties that can be handled online. Currently, free registration is being promoted with the aim of locking in brokerage companies, strengthening databases, and leading to expansion of purchase sales, but it seems that both the number of accounts and the number of assessments have continued to increase steadily since the launch in 2022/11. In the future, we aim to monetize by expanding functions.
(Written by FISCO Visiting Analyst Miyata Hitomitsu)