November 13, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

As New Forests nears the completion of the term for its second round Australia and New Zealand Forestry Fund (ANZFF2), the manager has indicated the upcoming sale of four of its New Zealand-based assets.

Located across the North and South Islands in the established forestry regions of Blenheim, Southland, Taupo and Wairarapa, the estates have a combined area of almost 16,000 hectares consisting of radiata pine plantations that produce wood for both the domestic and international housing, fencing, and furniture industries. New Forests explained that all estates, with the exception of Taupo, are freehold. 

Headquartered in Sydney since its inception in 2005, New Forests is a certified B, global investment manager with operations in Australia, New Zealand, Southeast Asia, Africa, and the U.S. that offers high-impact strategies in sustainable forestry, natural capital, agriculture, and their related sectors – investments that the firm sees as central to the transition to a sustainable future. 

The firm currently has A$10.73 billion (US$7.3 billion) in AUM across more than 1.2 million hectares (3.4 million acres) spread across a diversified portfolio of sustainable timber plantations and conservation areas, carbon and conservation finance projects, agriculture, timber processing, and infrastructure.

Through the responsible management of these holdings, New Forests aims to generate shared prosperity for its clients and the communities in which it is active by backing investment strategies that support the role of forests as nature-based solutions that provide sustainable wood fiber for the growing circular bioeconomy, while being a contributor to the sustainable development of regional economies and rural communities. 

The announcement about placing these four assets on the market follows the successful divestment last month of Forico – a 170,000-hectare hardwood forestry plantation in Tasmania – to a consortium of investors, including UniSuper, Pension Protection Fund, and APG Asset Management, on behalf of its pension fund client ABP. 

A New Forests-managed entity and its co-investors initially acquired Forico in 2013 for an undisclosed amount from the Receivers of Gunns Ltd, KordaMantha. At the time, Managing Director David Brand stated that the deal made New Forests the largest forestry investor in Australia with $2.5 billion AUM.

Over the past decade, much work has been undertaken in partnership with Forico to help transform the asset into one of Australia’s top sustainable timber producers. 

The scope of the deal was enormous. Forico is the largest private forest management company in Tasmania and the forestry asset is one of the largest hardwood plantation estates by productive area in Australia, making it a key supplier of sustainable hardwood to both the domestic and international markets for end uses such as packaging and tissues. 

Forico’s market-leading approach to valuing natural capital has been evident in their sustainability reporting demonstrating that the estate is sequestering more than 123 million tons of CO2e. Furthermore, the current plantation rotation is expected to remove from the atmosphere and sequester another 24.7 million tons before it is harvested and replanted for the next rotation.

For this work, Forico became the first forestry manager in Australia to earn FSC® Ecosystem Services certification thanks to its mission to protect biodiversity values across its estate. 

Much like Forico, New Forests explained that the four assets being placed on the market now all present future carbon market opportunities with approximately one quarter of the plantations established on post-1989 land, which is registered in New Zealand’s Emissions Trading Scheme (ETS), and have been third-party certified for sustainable forestry management. 

“We have managed these assets on behalf of investors for 10 years, and over this time, working closely with the on the ground property managers, have increased production, improved efficiencies, and added sustainability metrics to improve the overall health of the assets,” said David Shelton, managing director, Australia and New Zealand, New Forests. 

“Forestry is an important industry for New Zealand, contributing to the economy, mitigating against  climate change, and playing a role in the circular bioeconomy.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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