December 10, 2021
Sumitomo Realty & Development Co., Ltd.

Remodeling to Meet Energy Conservation Standards for Newly-Built Houses*¹

High Thermal Insulation Remodeling Plan by Shinchiku Sokkurisan
Launched Nationwide- Available from a single room to an entire house Sumitomo Realty & Development Co., Ltd. (Headquarters: Shinjuku-ku, Tokyo; President: Kojun Nishima;
hereinafter “Sumitomo Realty”) has been engaged in the remodeling business of old houses under the brand“Shinchiku Sokkurisan” in 46 prefectures throughout Japan (excluding Okinawa), and the cumulative total ofunits contracted has reached 150,000 units*² since its launch in1996.
Sumitomo Realty has long been promoting energy-saving remodeling by improving thermal insulation
performance, which is an important basic function of a house along with seismic reinforcement. On December
13 (Mon) we will begin accepting orders nationwide for a high thermal insulation remodeling plan thatwill enable existing houses with low thermal insulation performance to achieve a thermal insulation
performance equivalent to the energy conservation standards for newly-built houses*¹.
This plan is available to the entire house, a single floor, or even to just individual rooms, enabling an increasein the thermal insulation performance only where it is necessary. In addition to insulating the rooms on six sides(the floors, walls and the ceilings) by using heat insulating materials that meet the 2016 energy conservation
standards, replacing the sashes and installing internal windows, the 24-hour ventilation with “ductless total heatexchange ventilation system” recovers about 50 to 80% of the heat energy (heat recovery) by reusing thecoolness or warmth in the room that escapes during ventilation, reducing the heating and cooling load in bothsummer and winter.
As there is an increasing awareness for remodeling that ensures
thermal insulation from the perspectives of decarbonization and healthconcerns such as heat shock caused by sudden temperature changes
during the winter season, improving the thermal insulation performanceof existing houses has become a social and technological mission.
With this new plan, we strive to improve the performance ofJapanese houses to ensure healthy and comfortable living. By
doing so, we will further increase orders and contribute to thelongevity of houses and the realization of a stock type society.

image*1. Compliant with the 2016 energy conservation standards*2. Number of units contracted for large-scale remodeling of detached houses and condominiums (as of June 30, 2021)

Thermal insulation performance of housing stock (50 million units)
Current standards(11%)
Not meeting the 1980
standards*² (no thermalinsulation, etc.)(30%)

1992 standards*¹(22%)

1980 standards(37%)*1. Standards established in 1992 based on the Act on the Rational Use of Energy*2. Standards established in 1980 based on the Act on the Rational Use of Energy
Source: Ministry of Land, Infrastructure, Transport and Tourism, Housing Bureau, estimates based on
statistical data, business surveys, etc. (2018)

Composition of final energy consumption (FY2019)
Transportation
sector
23.2%

Householdsector
14.1%

12,942 PJ

Companies, offices, etc.
62.7%

Source: FY2020 Annual Report on Energy (Energy White Paper 2021)

To achieve carbon neutrality by 2050, it is becoming compulsory for newly-built houses to comply with energy
conservation standards. However, as of FY2018, only about 11% of the existing housing stock (about 50million units) complies with the energy conservation standards, and about 30% has no thermal insulation. In
order to decarbonize CO₂ emissions from the household sector, which accounts for about 14% of Japan’s
total final energy consumption, it is essential to promote thermal insulation retrofitting of existing houses.

■ “Shinchiku Sokkurisan” Remodeling by Sumitomo Realty
The Shinchiku Sokkurisan remodeling business was launchedafter the Great Hanshin Awaji Earthquake of 1995 with thedesire to renovate existing houses to make them earthquake
resistant without the high cost of rebuilding. Based on ourconcept of safe and secure housing, it boasts the industry’s
foremost track record for full remodeling featuring earthquake
reinforcement work and a clear fixed-price system.
It marked 25th anniversary this year, since its launch in 1996, and the cumulative total of units
contracted exceeded 150,000 units (as of June 30, 2021). Today, the Shinchiku Sokkurisan has become so
popular across the nation that it is a brand synonymous with full remodeling. By leaving main structuralcomponents intact and improving housing functionality without rebuilding, the Shinchiku Sokkurisan
remodeling contributes to not only extending the useful lives of existing houses, but also to addressing thesocial issues concerning houses in Japan by being environmentally friendly, i.e. minimizing industrial
waste, CO₂ emissions, and waste of resources.

Unique Features of “Shinchiku Sokkurisan” Remodeling

BeforeInterior stripped down to
its main frame

After(1) Clear fixed-price system with no additional charge* (developed by the Company)
There will be no additional charges in the event that an unforeseen situation arises after construction hasbegun, such as discovering a rotten pillar that needs to be replaced after a wall is torn down.
This relieves customers’ concerns about costs, which is often the case with remodeling work, and allows
them to leave the work to us with peace of mind.
*Only when there are no changes to the scope of work requested by the customer.

(2) A dedicated sales engineer with knowledge and proposal skills manages the entire project
From initial consultation to planning, estimating, and construction management,a dedicated sales engineer manages the entire project. This prevents problems,such as the customer’s requests not being clearly communicated to the constructor
and not being reflected in the construction work, and allows us to proceed with theconstruction of the house based on the customer’s requests.
(3) A lineup of reliable seismic resistance and vibration control reinforcements for buildings of allages
For earthquake countermeasures to ensure the safety of buildings, we haveestablished a system that can propose the most suitable seismic resistanceand vibration control reinforcement plan for buildings of all ages. Our plans
combine seismic reinforcement proven through our experience in construction
and vibration control reinforcement, which includes a new patented method.
(4) Reliable quality through dedicated master carpenters, extensive construction manuals, etc.
We achieve reliable construction quality through the mastery of our dedicated master carpenters whoare skilled in large-scale remodeling, as well as detailed construction manuals based on data
accumulated over many years and a thorough inspection system.
(5) Reliable support system (after-sales service)
As for our regular after-sales service, we visit our clients for inspection one month,three months, and one year after completion. In addition, our Customer Center
always responds to inquiries about problems and repairs regardless of the urgencyof the situation.

■ “Shinchiku Sokkkurisan” – Model of extending useful life of existing houses by renovation
Key issues with the housing stock
Extended useful life through improved functionality
Earthquake-proofing and seismic retrofitting
Disaster People
Prevention
Revised floor plans to suit changing lifestyles• Shorter life cycle than houses inEurope and the U.S.
• Insufficient earthquake
resistance and insulation• Mismatches between lifestyles andfloor plans

Through the Shinchiku
Sokkurisan
remodeling:• Environmental impact fromwaste generated whenrebuilding

Reduced environmental impact
Reduced waste by leaving main structural components
intact to lower CO2 emissions and improve energy-saving
functionality

Environment

Renovation of traditional-style houses harmonizes
the cityscape
Traditional-style house exteriors left in place, harmonizing
with other homes in the community; interiors modernized
to match current lifestyles

Community■ Social issues concerning houses in Japan
Although the penetration rate of earthquake resistant houses in Japan is increasing every year, there are still many houses with low
earthquake resistance. Moreover, the lives of houses in Japan are relatively short compared with those in Europe and U.S. and the shortrebuilding cycle has emerged as an issue in contemporary Japan. Waste from the demolition of houses accounts for a large share of waste
discharged by the construction industry. It is called for that lives of houses should be extended to facilitate the shift to a stock-type society
where houses could be used by successive generations.
❶ Earthquake-resistance of housing stock*Approx.

Without earthquake
resistance
7 million units*
With earthquake
resistance
6.1 million units*1981 or earlier➋ International comparison of the average ➌ Breakdown of construction waste
age of houses
Repair 570(Years)

100

80.6

80

From 1982
onwardFrom 1982 onward
With earthquake
resistance
40.5 million units*

66.6

House: 7,750(51% of thedischarged waste
through demolition)

60
40

38.2

200

Japan

USDemolition

UK

Building Work/
Renovation
Private Sector
Civil Engineering(Unit: thousand tons)

15,120Total:

12,95072,700 40,540 Public Sector

Civil Engineering

3,520

Sources: ❶ Ministry of Land, Infrastructure, Transport and Tourism“Progress of Earthquake Proofing of Houses”➋ Ministry of Land, Infrastructure, Transport and Tourism“International Comparison of Average Age of Houses Deregistered in 2018”➌ Ministry of Land, Infrastructure, Transport and Tourism “Residential Land Session, Panel on Infrastructure Development (36th) ”■ Shinchiku Sokkurisan initiatives concerning social issues
Extending the useful lives of houses through seismic reinforcement
Shinchiku Sokkurisan offers proposals for improving the house’s functionality to make it earthquakeresistant without rebuilding mainly through seismic reinforcement work based on earthquake
resistance diagnosis that meets the government’s safety standards.
Moreover, in the Kumamoto Earthquake of 2016, a series of powerful tremors caused the collapseof houses previously considered not to need seismic reinforcement under current laws. In view ofsuch circumstances, we developed a proprietary method to counter such a series of powerfultremors. With the addition of this new method, we now offer seismic reinforcement and damping
plans suitable for houses of all ages.
We are promoting houses where people can continue to live in with peace of mind byimproving the safety functions through this reinforcement work.

Contributing to the reduction of the environmental impact
Shinchiku Sokkurisan remodeling contributes to the reduction of theenvironmental burden by extending the life of the house through earthquake
reinforcement while the principal structural elements of the house are retained,
thus minimizing industrial waste discharge, CO2 emission, and waste ofresources, compared to the demolition involved in building a new house.

Revised floor plans to suit changing lifestyles
In addition to seismic reinforcement, Shinchiku Sokkurisan offers remodeling thatmakes living comfortable, with thermal insulation, waterproofing, barrier-freedesign, etc. Furthermore, in response to changes in family structures and aging
population, we offer solutions customized for the lifestyles without rebuilding,such as layout changes, extensions, downsizing, transformation of a two-story
house to a one-story house, or a two-family house.

Solution for rapidly
increasing disused houses
The high number of disused
detached houses has becomea social issue in Japan.
Through remodeling, turningthem into social welfare
centers, share- houses,
travelers’ inns, etc., wecontribute to utilization ofexisting house stocks andsupport safe and sustainable
city.

Interior stripped down toits main frame
AfterBefore

【Contribution to SDGs】
The initiatives related to this release contribute to the following SDGs’ objectives:

Goal 3 GOOD HEALTH AND WELL-BEING
Goal 7 AFFORDABLE AND CLEAN ENERGY
Goal 9 INDUSTRY, INNOVATION AND
INFRASTRUCTURE
Goal 11 SUSTAINABLE CITIES AND COMMUNITIES

Goal 12 RESPONSIBLE CONSUMPTION AND
PRODUCTION
Goal 13 CLIMATE ACTION
Goal 15 LIFE ON LAND

Sumitomo Realty has been working to solve social issues through its business activities under its
fundamental mission to “Create even better social assets for the next generation.” Going forward, theCompany will further contribute to realizing a sustainable society by creating high-value social assets withenvironment and social awareness.
＜Our Initiatives on ESG and SDGs＞
https://www.sumitomo-rd.co.jp/english/sustainability/