Portfolio of eight forests for sale

2:48 PM Friday March 30, 2018 Colin Taylor

An aerial view of part of Tapuwae Forest, on the northern side of Hokianga Harbour. Photo / Supplied

A portfolio of eight forests located in Northland, Waikato, Gisborne/East Coast and Canterbury has been put on the market with a substantial portion of the trees ready to harvest now.

Project Tapuwae Forest Estate comprises a total crop area of 2503ha, predominantly planted with pinus radiata, says Warwick Searle, forestry specialist with Colliers International who, with colleague Roger Seavill, is marketing the portfolio for sale by way of a two-stage expressions of interest campaign.

Initial expressions of interest close at 4pm on Friday, April 27, after which shortlisted parties will be confirmed, and final binding offers will be considered.

Searle says the forests have multiple domestic processing options and ports for log exporting situated nearby.

He says 55 per cent of the estate is for sale as freehold land and crop; and the remaining 45 per cent is for sale as forestry rights only.

“This is a superb opportunity to secure a holding in New Zealand’s highly productive forestry market,” Searle says.

“All eight forests, owned by the Australasian Timberland Fund II and NZFIT Limited, are in regions renowned in the forestry industry for the quality of their crops.

“The estate has been expertly managed by forestry services provider PF Olsen, which has maintained an extensive network of harvest infrastructure across many of the forests.

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Ngatapa Forest on the East Coast is located 25km northeast of Gisborne Port. Photo / Supplied

“With a substantial portion of the crop available to harvest now, investors have the opportunity to draw income from these timber assets almost immediately.”

The crop for sale mostly comprises radiata pine, as well as 96ha of minor species including cypress and douglas fir.

About1496ha is unpruned and the balance is pruned - with a small area only partly pruned.

The Northland forests in the estate, Waima and Tapuwae, are located on either side of Hokianga Harbour and have a total crop area of 487ha.

Tapuwae Forest, on the northern side of Hokianga Harbour, is held by way of a 26-year single rotation forestry right that started in November 2006. The 246ha crop, planted between 1991 and 2002, is mostly pruned radiata pine along with 41ha of cypress.

Waima Forest, on the opposite side of the harbour, is offered for sale as freehold land and crop with a net stocked area of 240ha. The radiata pine forest was largely planted in 1993 and 1994, with a small area planted in 1998. Just under half is pruned.

The nearest export port is Northport at Marsden Point. Domestic processing options include Juken NZ’s nearby mill at Kaitaia, as well as Waipapa Pine, Rosvall Sawmill, Carter Holt Harvey and Marusumi further afield.

In the Waikato, Stoneleigh Forest is for sale as freehold land and crop with the 127ha landholding sited just south of Te Kuiti, directly off State Highway 30.

Searle says 87ha of 25-year-old radiata pine is pruned and ready for harvest. A further 37ha of radiata was harvested last year, with replanting planned for this year. The forest also has some small areas of minor species.

Stoneleigh is around 177km from the Port of Tauranga with domestic processing options closer to the forest including: RH Tregoweth, Waitete, Carter Holt Harvey Tokoroa, OJI, Pacific Pine, Kiwi Lumber, Tenon, Red Stag, Claymark and Pukepine.

Searle says half of the estate’s forests – four of them – are in the Gisborne/East Coast region, which is predominantly export focussed and have a total crop area of 1041ha.

Rangikohua Forest, northeast of Gisborne, is held by way of a 35-year single rotation forestry right that started in July 2008. The forest comprises 48ha of radiata pine planted in 1998 and a further 341ha planted in 2008; the vast majority of which is unpruned.

“A profit share of carbon credits is available under the Emissions Trading Scheme (ETS).”

Ngatapa Forest, located 25km northeast of Gisborne Port, is for sale as freehold land and crop which is largely pruned. The 163ha radiata pine forest was mostly planted in 2002, with another 8.8ha planted in 2012.

Buddo Forest, south of Gisborne, is held by way of a 23-year forestry right that started in January 2009. The 197.1ha radiata pine forest, planted between 1981 and 1996, is mostly part-pruned.

“Carbon credits on the post-1989 plantings are available under the ETS.”

Okare Forest 56km inland from Wairoa, is held by way of a 35-year forestry right that started in July 2008. The 291ha forest, which is mostly pruned, was planted between 1995 and 2005, and chiefly comprises radiata pine, along with 5ha of minor species.

Searle says the Gisborne/East Coast region’s forestry resources are predominately exported through Eastland Port, Gisborne, which processed more than 2.9 million tonnes of logs in the last year. Domestic processing options include Wairoa Sawmill, and PanPac Mill near Napier.

The sole South Island forest in the portfolio, Glen Arlie, is located southwest of Christchurch, and is offered for sale as freehold land and crop.

The largest forest in the portfolio at 847ha, Glen Arlie was first planted in 1975 with a crop mostly comprising pruned radiata pine, along with 42ha of douglas fir and 5ha of cypress.

“Some of the forest was recently harvested and is ready for replanting this year,” Searle says.

Extensive harvest infrastructure is in place and all roading material can be sourced on-site.

The nearest export port is Lyttleton and domestic processing options include: Mitchell Bros at nearby Darfield, as well as Davies Sawmill, McVicars, and the Daikin MDF plant.

Searle says the estate is the first significant forestry portfolio to be offered for sale on the open market since the new Government introduced revised foreign ownership rules. 

“Project Tapuwae Forest Estate is already under foreign ownership, so it would make little sense for the Government to prevent a sale to a similar reputable party should any domestic purchasers not be competitive,” he says. 

“The new Government recognises the need for substantial forestry investment to achieve its climate change and regional development policy goals.

“Further, New Zealand’s pool of domestic capital for buying forestry land and planting trees is shallow, and offshore capital is vital for sustaining the industry and achieving these long-term policy outcomes.”

Searle says any international groups interested in bidding on the estate should confirm with their legal advisers the latest foreign investment rules, as it may relate to their proposal.

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Warwick Searle, Colliers International.