Sumitomo Forestry’s United States subsidiary Gehan Homes has signed a business acquisition agreement with CDL Homes which operates a housing business in the Denver region of Colorado. Source: Timberbiz
This marks the Sumitomo Forestry Group’s first foray into the Denver region for its housing business.
The Sumitomo Forestry Group has focused on expanding its housing business in the United States and, at present, operates in 14 states across the country, including the State of Colorado.
The Group limits its operations to those areas where strong housing demand can be expected, due to increasing employment and populations.
Consequently, it has expanded its business to Dallas, Houston, Austin, and other regions
in Texas, where numerous companies are relocating due to tax incentives and low living costs, to Salt Lake City in Utah, to North Carolina and South Carolina on the east coast, and to Atlanta in Georgia.
The Sumitomo Forestry Group has gradually expanded the scale of its business through the acquisition of home builders in its areas of operation. The group’s closing in 2019 makes it equivalent to being the 10th largest home builder in the US, additionally expected to deliver roughly 9000 single family homes in the United States in 2020.
Since 2018, the Sumitomo Forestry Group has also been diversifying its business through the development of multifamily residences commercial and mixed-use facilities, and through its residential lot development business.
Its latest purchase, CDL Homes is engaged in the construction and sales of detached houses and town houses under the brand name of Wonderland Homes, primarily targeted at move up home buyers.
CDL’s integration into GH will lead to improved purchasing power which, in turn, will bring a range of benefits such as reduced materials costs GH will l seek to leverage such benefits to improve its profitability.
In addition, the Sumitomo Forestry Group’s US subsidiary Crescent already operates a multi-unit residence business in the Denver area, and the Group intends to consider how synergistic effects can be utilized.
The Denver area of Colorado is one of the leading housing markets in the mountainous region of the southwest United States. It is the 11th largest market for newly built single-family homes in the country. The economy of the Denver area is growing strongly due in large part to the hi-tech industry and employment opportunities are expected to remain widespread going forward. For these reasons, the population of the Denver area is predicted to expand and contribute to the stable growth of the housing market.
