Japan’s Sumitomo Enters Aussie Market via $516M Sydney Residential JV With Mirvac

Japan’s Sumitomo Corporation has made its maiden property investment in Australia by entering a 50:50 joint venture with real estate giant Mirvac on an A$830 million ($516 million) Sydney residential project.

The tie-up for the under-construction Highforest in Sydney’s northwest suburb of West Pennant Hills marks the start of a long-term partnership, the companies said Thursday in a release. Situated on the edge of the Cumberland State Forest, the Highforest development will have 165 detached and attached houses and 249 apartments, along with publicly accessible open spaces and a range of community facilities.

ASX-listed Mirvac has sold more than 60 percent of the homes and apartments released at Highforest, with the first residents set to move in from September 2025, said chief executive Campbell Hanan.

“We are thrilled to be entering into a joint venture with a high-calibre partner like Sumitomo Corporation at Highforest,” Hanan said. “This joint venture is in line with our strategy to expand capital partnerships to support our capital requirements and accelerate the launch of projects to create value across our development pipeline.”

Apartments Appeal

Sumitomo is taking its first step into Sydney residential as the local market shows signs of stabilising after values have slid since reaching a peak in August, according to property agency Rose & Jones. In November, the Harbour City’s dwelling values were down 0.2 percent from the prior month and 0.5 percent on a quarterly basis, the consultancy said, citing the CoreLogic Home Value Index.

“Houses have experienced a sharper correction, with values declining 0.8 percent over the quarter, compared to a 0.4 percent rise for units,” Rose & Jones said. “This divergence points to increased interest in apartments, driven by affordability pressures and changing buyer demographics.”

Highforest is tempting would-be buyers with the opportunity to live alongside Australia’s only metropolitan state forest. The project is a 25-minute drive to Sydney’s central business district and 800 metres (875 yards) from the new Cherrybrook Metro station.

Scheduled for completion in 2028, Highforest will also include public spaces for the wider community, including a cultural classroom with a yarning circle, walking trails connecting to the forest, a children’s bike track and shaded barbeque and seating areas.

The collaboration combines Sumitomo’s capital strength with Mirvac’s residential development expertise, said Yukihito Honda, CEO of the diverse urban development group at Sumitomo Corporation.

“Our alignment in vision makes this joint venture a very natural fit,” Honda said. “We look forward to a successful venture that will benefit future residents, the community and stakeholders alike.”

Outbound Surge

Japanese outbound investment helped drive a 12 percent year-on-year rise in transactions of income-generating real estate in Australia to A$23.8 billion ($14.9 billion) for the first three quarters of 2024, according to MSCI.

The biggest transaction Down Under in the year to date was Mitsui Fudosan’s A$1.3 billion buy of a 66 percent stake in 55 Pitt Street near the Sydney harbourfront. Japan’s largest developer co-owns the office project with Mirvac, which will develop and construct the 55-storey building and provide leasing, investment and property management for the finished asset.

Last year, Japan’s Mitsubishi Estate teamed up with local investment firm AsheMorgan to acquire the 60 Margaret Street office tower and its MetCentre retail podium in the Sydney CBD from Blackstone and Mirvac for A$777 million, marking Australia’s biggest real estate deal of 2023.