Sumitomo Forestry establishes joint venture for entry into UK real estate market

Interior view of the six-storey mass timber office currently under construction in London, UK (Image: Sumitomo Forestry)

Sumitomo Forestry has announced that it has jointly established three companies — Bywater SFC Holdings, Bywater SFC Management and Bywater SFC Investments, or collectively known as Bywater SFC — with British real estate developer Bywater Properties.

With a shared business vision to realise decarbonisation, Sumitomo Forestry and Bywater are jointly developing a six-storey mass-timber office building in London.

The establishment of Bywater SFC will serve to further strengthen the relationship of these two companies. It also marks Sumitomo Forestry’s full-scale entry into the UK real estate development market to promote environmentally conscious properties and mass timber constructions in Europe.

Bywater specialises in the development, planning and management of real estate properties, primarily offices. It has developed mass timber and environmentally conscious properties in UK cities such as London, Manchester, Glasgow and Belfast.

In February 2022, Sumitomo Forestry established Sumirin UK which has been collaborating with Bywater to develop the above-mentioned office building.

Bywater SFC will develop real estate properties under the Bywater brand name. Its expansion into the European market is planned to include developing mass timber multi-family dwellings, refurbishing buildings, and several environmentally conscious projects using existing construction methods.

According to Sumitomo Forestry, demand for environmentally conscious real estate is high in Europe, which leads the world in terms of climate change policies.

Under the UK’s Assessment of Environmental Performance of Buildings (BS EN15978), for buildings constructed of wood from sustainable forests and designed so that the wood is reused after demolition, wood carbon sequestration can be subtracted in the calculation of the building’s Whole Lifecycle Carbon (WLC) emissions.

The UK ranks number one in Europe in terms of commercial real estate investments and the number of residential transactions, as reported by the European Mortgage Federation.

Recent advances in wood fireproofing and other technologies have led to the streamlining of building certification and administrative licensing systems, resulting in an increase in the number of medium- to large-scale mass timber construction projects.

Sumitomo Forestry Group is engaged in a range of businesses revolving around wood, including forest management, timber and building material procurement and manufacturing, wooden construction, and wood biomass power generation.

Within the construction industry, it is currently involved in the development of 4,000 mass timber build-to-rent housing units per year using 2×4 construction, as well as numerous medium- to large-scale mass timber constructions both in Japan and abroad, such as a 15-storey office building in Melbourne, Australia, a six-storey office building in London, UK, a seven-storey office building in Dallas, US, and a three-storey office building in Atlanta, US.