Sumitomo Forestry : Establishes Joint Venture for Full-scale Entry into UK Real Estate Market~ to develop environmentally conscious, mass timber properties in Europe ~

construction and carbon sequestration volume of Harvested Wood Products (HWP)*2, such as buildings and furniture. Under the UK's Assessment of Environmental Performance of Buildings (BS EN15978)*3, 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 Life-Cycle Carbon (WLC) emissions.

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. The UK ranks number one in Europe in terms of commercial real estate investments and the number of residential transactions.*4 London is highly renowned for its robust and liquid market, as it maintains the top position in real estate transparency in terms of legal framework and transaction information disclosure.*5

■Future developments

Sumitomo Forestry is involved in the development of 4,000 mass timber build-to-rent housing units per year using 2x4 construction, as well as numerous medium- to large-scale mass timber constructions both in Japan and abroad, such as a 15-story office building in Melbourne, Australia, a 6-story office building in London, UK, a 7-story office building in Dallas, USA, and a 3-story office building in Atlanta, USA. Through Bywater SFC, Sumitomo Forestry will promote environmentally conscious real estate development projects and the construction of medium- to large-scale mass timber buildings. In addition to growing its existing real estate development operations in the US, Australia and Asia, Sumitomo Forestry will strive to expand into new markets in Europe.

Sumitomo Forestry will also usher in the popularization of net zero carbon buildings, which reduce operational carbon to virtually zero by combining energy conservation, energy creation, renewable energy, carbon credit offsetting and other initiatives. We believe we can achieve this by building a network in Europe, with its strong real estate market and operating environment that values wood and environmentally conscious buildings.

Sumitomo Forestry Group is engaged in a broad range of businesses revolving around wood, including forest management, timber and building material procurement and manufacturing, wooden construction, and wood biomass power generation. Through the Sumitomo Forestry Wood Cycle, an element of our long-term vision for 2030 "Mission TREEING 2030", we are striving to increase the CO2 absorption of forests and store carbon for long periods of time with the popularization of mass timber buildings to contribute to decarbonization for the company, customers, business partners, and society. With the advancement of globalization being one of its long-term vision business policies, Sumitomo Forestry is also working to accelerate decarbonization initiatives in Europe.

*1 A construction method using mass timber, engineered wood of relatively large mass and volume made by combining multiple pieces of wood, such as CLT, LVL and other. For the press release about the office building currently under development in London by Sumitomo Forestry and Bywater, please access the following: https://sfc.jp/information/news/2022/2022-02-14-01.html

*2 An abbreviation for Harvested Wood Products. Refers to wood used in buildings, furniture and other after harvesting. Since the second commitment period of the Kyoto Protocol, carbon stock changes resulting from HWP are accounted for as greenhouse gas absorption or emissions.

*3 Conforms to the British National Standard for the Assessment of Environmental Performance of Buildings, which is based on the European Standard. BS EN is an abbreviation of British Standard European Norm.

*4 Annual number of houses sold in each European country, released by the European Mortgage Federation.

*5 Real estate transparency is a comprehensive evaluation based on laws and regulations, specialists,

level of information disclosure related to real estate transactions and investor protection systems. This ranking was created by Jones Lang LaSalle IP, Inc.

■Interior view of a 6-story mass timber office building currently under construction in London (Image)

■Sumitomo Forestry Group's Global Medium- to Large-Scale Mass Timber Developments

（Press Release / WEB Site）

• Melbourne, Australia / 15-story wooden office

Press Release ：https://sfc.jp/english/news/pdf/20211006_01.pdf

• London, UK / 6-Story Mass Timber Office WEB Site ：https://paradise11.co.uk/
• Dallas, U.S.A. / 7-Story Mass Timber Office

Press Release ：https://sfc.jp/english/news/pdf/20221226_01.pdf

• Atlanta, U.S.A. / 3-Story Mass Timber Office

Press Release ：https://sfc.jp/english/news/pdf/20221201_01.pdf

■Bywater SFC Group overview

The three newly established companies are Bywater SFC Holdings, Bywater SFC Management and Bywater SFC Investments (collectively referred to as Bywater SFC Group). Sumitomo Forestry will invest in Bywater SFC Holdings through its wholly owned subsidiary, Sumirin UK. Bywater SFC Holdings is the holding company that oversees Bywater SFC Management and Bywater SFC Investments. Bywater SFC Management will manage the development of projects and Bywater SFC Investments will be responsible for investing in each project.

The overview of Bywater SFC Management, which primarily is involved in real estate development, is as

■Bywater Properties overview