Hines Brings Japan’s Sumitomo Forestry, Chuo-Nittochi Into Virginia Apartment Project

US builder Hines has formed a joint venture with Sumitomo Forestry and Chuo-Nittochi to develop a multi-family project in northern Virginia, as Japanese real estate groups continue to explore opportunities overseas.

The six-storey Potomac Shores will provide 365 rental apartment units on the Cherry Hill peninsula overlooking the Potomac River south of Washington DC, the Tokyo-based companies said in a release. Construction is to begin this month, with rentals commencing by April 2027.

Sumitomo Forestry entered the US residential development market in 2018 and began construction last year on apartment buildings totalling 5,344 units, ranking fourth in the country, according to the statement. The deal marks Chuo-Nittochi’s sixth tie-up with the Sumitomo Group member, 13th US project overall and second in the national capital area, following a 400-unit co-development with Sumitomo Forestry and Tokyo Tatemono in Herndon, Virginia.

“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.

Timber on the Shore

Located at 1552 River Heritage Boulevard in Dumfries, Virginia, the Potomac Shores site measures 347,272 square feet (32,263 square metres). The project’s first floor will use reinforced concrete while the second to sixth floors will incorporate timber, drawing on the expertise of Sumitomo Forestry, which specialises in both housing and wood products.

No financial details of the partnership were disclosed. At the time of publication, Hines had not responded to inquiries from Mingtiandi seeking more information about the project.

Potomac Shores is the second Hines joint venture with Japanese partners announced in as many months, after the privately held builder teamed with Sumitomo Forestry’s sister firm Sumitomo Corporation and property giant Mitsubishi Estate on a high-end office project in central Mumbai.

With India’s Kanakia Group as land partner, the Kohn Pedersen Fox-designed “trophy” building will span 1.5 million square feet atop a 3 acre (1.2 hectare) site in Mumbai’s Greater Bandra Kurla Complex, the companies said in late May.

Betting Big Overseas

Sumitomo Forestry’s latest initiative comes three months after the firm announced a A$1.2 billion ($790 million) rental residential JV with Brisbane property firm Cedar Pacific. The venture focuses on build-to-rent homes and bringing more sustainable housing to the Lucky Country with projects incorporating cross-laminated timber.

Last September, Sumitomo Forestry bought a 51 percent stake in Australia’s largest homebuilder, Metricon, in a deal valuing the company at A$230 million. In December, Sumitomo Corporation made its maiden property investment in Australia by entering a 50:50 JV with real estate giant Mirvac on an A$830 million Sydney residential project.

Australia overtook the US last year as the biggest recipient of Japan’s outbound investment in commercial real estate, according to Cushman & Wakefield, with inflow from Japanese players reaching at least $1.76 billion.

In the UK market, Tokyo-based Yasuda Real Estate last week disclosed its participation in Far East Orchard’s maiden private fund focused on purpose-built student accommodation in British cities, with the vehicle having secured £96 million ($129.5 million) in committed capital.

In April, Mitsubishi Estate began construction of two wholly owned London office projects with a combined development cost of JPY 248 billion ($1.7 billion). They involve the redevelopment of the former ITV head office and studios on London’s Southbank for JPY 160 billion and the large-scale renovation of Mitsubishi Estate’s already-owned building at 1 Victoria Street in Westminster for JPY 88 billion.