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Mass timber solutions to feature in build-to-rent collaboration between Cedar Pacific and Sumitomo Forestry.
In a key move towards sustainable urban development, Cedar Pacific, an Australian property investment firm, and Sumitomo Forestry Co., Ltd., a Japanese leader in forestry and wood management, have announced a strategic partnership to create build-to-rent (BTR) assets in Australia and New Zealand. The collaboration aims to meet the rising demand for rental housing in these regions while adhering to high Environmental, Social, and Governance (ESG) standards. (main pic: render of Cedar Pacific’s and Sumitomo Forestry Brisbane build-to-rent development.)
The partnership plans to develop a $1.2 billion portfolio of BTR apartments, with a strong emphasis on sustainability. Sumitomo Forestry will acquire just under 50% equity stakes in BTR projects under the joint venture, starting with a $375 million development already underway in Brisbane.
Bernie Armstrong, CEO of Cedar Pacific, expressed excitement about the partnership, stating, “This partnership allows us to combine both companies’ development expertise with leading-edge sustainability practices, creating communities that are not only desirable places to live but also contribute positively to the environment and communities in which they are located.”
Yasuhiro Odagane, Managing Director of Sumitomo Forestry Australia, echoed this sentiment, highlighting the company’s commitment to expanding its sustainable development business globally.
George Konstandakos, General Manager at Sumitomo Forestry Australia, elaborated on the partnership’s goals, stating, “Our combined expertise will allow us to deliver innovative BTR communities that promote the use of timber technologies such as cross-laminated timber (CLT) to meet the needs of residents and contribute to the creation of a more sustainable future.”
The first project in the joint venture is 50 Quay Street in Brisbane, which is part of the State of Queensland Treasury’s affordable BTR pilot program. The development, currently under construction with Hutchinson Builders, will feature 475 apartments overlooking the Brisbane River, with 50% of the apartments offered at below-market, affordable rents. The project aims to operate at net carbon neutral from day one and is being constructed to 5-star Green Star standards.
The joint venture has a pipeline of other projects in Melbourne, Canberra, Brisbane, and Auckland, with details to be announced in due course.
Savills Capital Advisors and Savills Australia and New Zealand played a crucial role in advising Cedar Pacific on the capital raise for this venture. Joe Guilfoyle, co-Head of Savills Capital Advisors, highlighted the attractiveness of BTR investments due to favourable supply/demand dynamics and resilient cash flows. Conal Newland, Head of Operational Capital Markets at Savills Australia and New Zealand, emphasised the importance of BTR in addressing the housing shortage in Australia.
In conversation with Built Offsite, Konstandakos further emphasised the importance of sustainable construction methodologies, stating, “We’re looking to improve the built form and promote more sustainable construction methodologies. We want to expand that in Australia, so our focus is on expanding the use of CLT and other engineered timber materials as well.”
He added, “The considerations are really around reducing the embodied carbon in buildings and making them more sustainable. That’s really the driver for the use of timber.”
Konstandakos also highlighted the need for designing buildings with timber in mind from the outset, rather than retrofitting them from concrete designs. “We are building assets, so a lot of the issues with buildings are that they are not designed upfront to be timber. And, that’s why we want to be involved right from the beginning, from the conceptual stage, is to design them efficiently in timber, not to retrospectively change them from concrete.”
See: https://www.cedpac.com/
See: https://sfc.jp/english/business/overseashousing/australia/
