The Sumitomo Forestry Group is expanding housing and real estate businesses in the United States and Australia that have large, mature wooden house markets, as well as in Asian regions where significant growth is expected in the future. We not only sell housing that matches the needs of the climate and natural features as well as markets in each region but also engage in various initiatives to create shared value through our business activities by respecting employees, local residents, corporate organizations, society and every other stakeholder.

Respect for Regional Culture for Housing, Lifestyle, and Architecture

Sumitomo Forestry has built a proven track record in wooden house construction in Japan, and its overseas housing and real estate businesses also place value on construction that adapts to the living customs and culture of each region. We respect the business policies of our local Group companies that are well versed in the culture, needs and characteristics of each region. This approach allows us to create a system that is able to provide products and services best suited to each region.

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United States Business

Sumitomo Forestry is expanding a multifaceted housing and real estate business in the United States where stable population growth and strong housing demand are expected to continue in the future.

We entered the U.S. housing market—the biggest in the world—in 2003. Initially, it provided single family homes in Seattle, Washington, which is our base for trading timber and building materials for more than fifty years. Today, we have five home builder companies in a broad area from the west to east coast that are expanding the subdivision business and providing high-quality wooden houses. Through careful marketing in the business regions of each company, we supply various types of housing in a broad price range, such as detached houses, town homes and condominiums, to adeptly respond to the ever more diverse range of needs.

Housing Construction Business Areas

Housing Construction Business Areas

We started a multi-unit residential development business in 2016. In 2018, two companies joined the Sumitomo Forestry Group to expand business domains; Crescent Communities, a general real estate company which develops multi-unit residential, offices, logistics centers and other commercial and mixed use complexes, and Mark III Properties, a land development business. We are establishing a more stable and diverse revenue base in the United States, while building a framework that can provide a wider variety of housing and real estate products.

Housing, Multi-unit Residential and Mixed Use Commercial Complex Development Business Areas

Housing, Multi-unit Residential and Mixed Use Commercial Complex Development Business Areas

Detached Housing

Town Homes

Condominiums

Multi-Use Complexes (Rental Housing/Commercial Facilities)

Land Development

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Australian Business

Three Group home builder companies are expanding the -order homes and spec home businesses in Australia. By adding Scot Park Group in Western Australia, in 2019, the Group built an operation network with coverage from eastern to western Australia and provides quality wooden housing at a broader scope. Australia is expecting long-term population growth in light of its immigration policies, and we will provide homes that are affordable to a various income groups by developing business using multiple brands with varying price ranges according to each region.

Asian Business

Sumitomo Forestry engages mainly in the large-scale real estate development business in South East Asia. By employing a joint venture scheme, we are promoting the provision of high-quality homes by taking advantage of the functionality and resources of local partners and integrating the technology and expertise possessed by Sumitomo Forestry and its affiliated companies.

In China, Sumitomo Forestry is also providing outsourcing service that produces residential blueprint data. This business plays a role in heightening operational efficiency and quality in the housing industry overseas.

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Understanding and Assessing Development Risks

Properly understanding the geological and geographical risks unique to each property is vital in the development of housing and real estate. The Sumitomo Forestry Group has put in place the necessary systems to verify whether there are any issues through careful surveys at the assessment stage of development in addition to other multistage checks done before determining how to implement a project.

We first select the land to develop and then outsource soil survey and environmental surveys to external research firms to fully understand the risks from an objective standpoint. We not only ask local affiliated companies to give their input on risks but the Sumitomo Forestry head office also conducts property inspections and environmental and social impact studies using its own CSR risk assessment sheet for projects larger than a certain scale. Management also provides feedback through meetings at the Sumitomo Forestry head office to analyze risks from diverse multistage perspectives. We only engage in projects determined to be acceptable through this process.

Construction also comes with the risk of occupational accidents during the construction phase. Sumitomo Forestry complies with occupational health and safety laws and works to prevent occupational accidents at local affiliated companies and also puts in place systems to immediately report any accident that occurs to the headquarters so it can quickly understand what happened as well as plan and execute measures to prevent recurrence.

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Community Development to Enhance the Value of Living Spaces

Each Group company works to heighten the level of enhancements to lifestyle and environmental aspects when developing housing, commercial complexes and other facilities.

We strive to provide robust common areas in addition to residential units through five home builder companies in the United States that sell single-family spec homes, such as the installation of green areas and promenades formed to fit the size, landscape and surrounding environment of the property. Large-scale developments heighten community value and satisfaction of lifestyle environments by installing information centers built alongside pools, parks, tennis courts, cafés and other amenities.

Crescent Communities, a real estate developer, provides living and community spaces that offer more value than just a home to residents by incorporating the distinct characteristics and history of the surrounding environment in building specifications, spatial design, and resident services with the participation of the neighbors and everyone else involved when planning the concept for each project.

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Sales of Environmentally-conscious Housing

Henley Properties drove forward efforts to enhance energy-saving performance in the Australian housing industry, such as pioneering its own standard specifications ahead of competitors, by recommending a five-star energy rating*1 for the standard energy-saving performance in 2001. Efforts toward the environment accelerated further after the involvement of the Sumitomo Forestry Group in 2009. We conducted a variety of initiatives to reduce the environmental impact, including the realization of the first zero emission house*2 for the general consumer as a major home builder company in the country.

In Victoria, Henley Properties also uses low carbon concrete by replacing approximately 20% of cement, the primary ingredient in concrete used in foundations of homes, with fly ash (waste produced when burning fossil fuels) and blast furnace slag (byproduct separated from iron ore in the iron manufacturing process in blast furnaces). The low carbon concrete reduces CO2 emissions by about three tons per home in the construction stage.

More than 80% of new homes built in Australia uses veneer glass because multi-layered glass has not become as popular for use in homes as in Japan due to cost. However, in 2018, Henley Properties was the first in Victoria to make multi-layered glass a standard specification in order to increase the insulation efficiency of homes*3.

Henley Properties also leads the industry in efforts to improve airtightness. A survey conducted in 2019 showed homes built by Henley Properties have shown airtightness roughly three times higher than the average home in Australia*4. This level of airtightness can reduce the power consumption necessary for heating and cooling the average home by approximately 25%.

Henley Properties is not only improving environmental performance but is also pioneering the development of residential properties that consider the health of the people living there. The Company is also developing a system to provide ventilation while mitigating construction, lighting, and heating costs to improve the air quality inside the home. Moreover, Henley Properties reviewed primary construction and finishing materials and adopted interior coatings with ultra-low VOC*5 in accordance with the advice from the National Health and Medical Research Council of Australia. These measures achieve housing that suppresses rising costs, maintains high quality, and protects the health of the people living there.

*1 An evaluation metric of the energy burden for heating and cooling the inside of a building in Australia. Insulation, windows, the type, size and orientation of the building, and the climatic zone are all items included in this metric.

*2 Environmentally-friendly housing expected to have an energy-saving effect of more than 70% compared to conventional housing.

*3 Multi-layered glass is effective in improving insulation efficiency of homes by limiting the thermal reflux to approximately 35% less compared to veneer glass.

*4 The average value for Henley Properties is 5.9 ACH where the average housing in Australia is 15.4 ACH (ACH is an index that indicates the air leakage per hour at a 50 Pa indoor-outdoor air pressure difference. The lower the value the higher the airtightness).

*5 Volatile Organic Compounds (VOCs) are organic chemical substances volatile in the air at ordinary temperatures and pressures. Many construction coatings and adhesives contain these organic chemicals and have the potential to cause sick house syndrome or impact human health in other ways when dispersed in large quantities.

Ventilation System Development

Coatings Containing Low VOC Percentage

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Occupational Health and Safety Management

Henley Properties also focuses on worker safety management in Australia. The Company is developing businesses across four states of Australia: Victoria, Queensland, New South Wales, and South Australia. Under the company-wide safety management policies, Henley Properties builds the highest level of safety management system that includes drafting annual safety management policies and targets, conducting risks assessments of each site (evaluating danger and planning measures to mitigate those risks), providing on-site managers and employees with safety management training, understanding the safety management capabilities of partner companies, and ensuring thorough reports on any accidents that do occur. The Company also acquired the ISO 45001 certification, an international occupational health and safety standard, in April 2019.

Additionally, Wisdom Properties Group, a business operator in New South Wales, has established an advanced occupational health and safety management system. The Company has also acquired the AS4801 certification, an Australian occupational health and safety standard. The Company has built system able to provide stable on-site operations by preventing accidents before they happen and protecting workers’ health.

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Building Positive Work Environments

In the United States, federal and state laws prohibit any employment discrimination for reasons such as race, gender, religion, birthplace, or health condition. Sumitomo Forestry Group companies in the United States strive to share the same philosophy in prohibiting discrimination and providing fair opportunities, by including these topics in the employee handbook.

Each of these companies also engages in various other measures, such as consultation hotlines to report harassment and discrimination in the workplace. Crescent Communities has put in place initiatives to provide comfortable environments for employees to work beyond strict legal compliance, such as the adoption of a system whereby a corporate insurance policy covers 60% of the salary of an employee who cannot work for seven days or more due to reasons such as injury, illness, or mental disease.

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Third-Party Evaluation

Henley Properties Group Honored as Australia’s No. 1 Home Builder in the Professional Major Building Category of the HIA-CSR Australian Housing Award

Henley Properties Group has received the HIA Australian Professional Major Builder award at the HIA-CSR Australian Housing Awards held in May 2020 by Australia’s Housing Industry Association (HIA) as Australia’s No. 1 home builder.

This event has a history of over 70 years since its establishment in 1945. It is organized annually by HIA, which is an industry association with more than 40,000 members who are housing construction companies and renovation operators undertaking more than 85% of the overall construction work in Australia. Winners of state-level events from the previous year move on as representatives of their states to compete during this year’s event to determine the No. 1 position in Australia.

The Professional Major Builder award is given to the most outstanding major home builder companies —with an annual turnover of AU$50 million or more—in terms of industry leadership, customer service and satisfaction, business scope, financial soundness, undertaking of social contribution activities and other factors. Henley Properties has won the No. 1 position at the state level three times in the state of Victoria and eight consecutive times since 2012 in the state of Queensland. At the national level, this is the second time Henley Properties has emerged as No. 1 in Australia since 2015.

This time, Henley Properties was given the award due to its meticulous handling of customers, including a maintenance hotline that is operated throughout the year and its long-term structural guarantee. Henley Properties was also recognized for implementing a pioneering employee development program that seeks to nurture future industry leaders.

Crescent Communities Receives Top Award at the NAHB Multifamily Pillars of the Industry Awards

Crescent Communities, LLC, a Group company in the United States, has been named Multifamily Development Firm of the Year award at the 2019 Multifamily Pillars of the Industry Awards organized by the National Association of Home Builders (NAHB).

With a history stretching for over 70 years since its founding in the 1940s, NAHB, the organizer of these annual awards, is the largest housing construction industry body in the U.S., representing more than 140,000 members.

The Multifamily Pillars of the Industry Awards give public recognition to enterprises and projects in the multi-unit residential industry, appraising creative development concepts, innovative financing strategies, superior design and marketing in the development of multi-unit residential. Crescent Communities was honored as the Multifamily Development Firm of the Year, as the top multi-unit residential developer in the U.S. and NOVEL South Capitol—a multi-family housing project in Washington, D.C. in which Crescent has been involved in development—was named the Best Overall Leasing or Sales Campaign for a Multifamily Community*.

* Category to commemorate projects with superior initiatives to attract customers

Exterior View of NOVEL South Capitol

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Sustainability Report