One of the world’s largest real estate developers, Hines Global Real Estate, has entered into a new joint venture with Sumitomo’s US-based subsidiary (Sumitomo Forestry America) and Chuo-Nittochi, in a deal that will see the first timber-concrete build-to-rent developments rise in Washington, D.C.
The partnership, which comes days after Sumitomo Forestry closed a deal on the Teal Jones Louisiana Holdings mill—its first timber mill in the United States—will see the Japanese giant further expand its footprint in the US market, particularly the build-to-rent sector. Having built more than 5,300 units since entering the US housing market in 2018 (making it the fourth largest builder in the USA), the new tie-up will see a six-storey timber-frame building rise on Potomac Shores, providing 365 apartment units on the Cherry Hill peninsula overlooking the Potomac River.
“Sumitomo Forestry has been working on residential land development projects with Hines since 2019, and this is its first time developing rental apartment buildings,” the companies said, while Potomac Shores marks Chuo-Nittochi’s first collaboration with Houston-based Hines.
Japan’s largest builders are piling into global markets
Located at 1552 River Heritage Boulevard in Dumfries, Virginia, the Potomac Shores site measures 32,263 square metres. The project’s first floor will utilise reinforced concrete. In contrast, the second to sixth floors will incorporate timber, leveraging the expertise of Sumitomo Forestry, which specialises in both housing and wood products. Potomac Shores is the second Hines joint venture with Japanese partners announced in as many months, following the privately held builder’s partnership with Sumitomo Forestry’s sister firm, Sumitomo Corporation, and property giant Mitsubishi Estate on a high-end office project in central Mumbai.
Sumitomo Forestry’s new deal comes after its Australian-based subsidiary (Sumitomo Forestry Australia) committed AU$1.2 billion to grow timber-based build-to-rent projects in Brisbane, Canberra, Melbourne and Auckland. In September, Sumitomo Forestry acquired a 51% stake in Australia’s largest housebuilder, Metricon, in a deal that makes the group responsible for building more than 7,000 new homes in Australia each year. The new deal comes as several of Japan’s largest builders—including Seiksui House—pile into the overseas real estate markets as a hedge against Japan’s sliding housing market, which has seen 2024 housing starts shrink to half of 1994 levels.
- To learn about Sumitomo Forestry’s plans to use “2 x 4” mass timber units to deliver social and affordable housing at scale, click here for Wood Central’s special feature.
