April 21, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Arotahi Agribusiness is managing the sale process for the largest redwood forestry estate in Australasia comprising more than 8,000 hectares (19,768 acres) of freehold land in New Zealand. 

Being divested by the New Zealand Redwood Company, the sale of this estate is being called a “once in a generation” opportunity by Jeremy Keating, managing director at Arotahi Agribusiness, who noted that this premium-species forestry estate is on pace to sequester 108,000 tons of carbon each year by 2033, while also having the potential to offer a supply of high-quality, sought-after lumber.

“This is a tremendously exciting proposition for both domestic and international investors looking to secure a large-scale forestry land holding for carbon and/or future harvesting,” said Keating. “It’s a highly compelling investment opportunity offering outstanding carbon sequestration and lumber potential that is likely to attract significant offshore and local interest.”

Residential and commercial wooden furniture and wood tool applications are expected to be the two largest drivers for growth in the global redwood market, which is forecast to see a CAGR of 5.5 percent between 2018-2028, according to Industry Growth Insight. North America is expected to be the market of highest demand, followed by Europe, and Asia Pacific. 

Accounting for a large proportion of the existing redwood forest in New Zealand, this estate is held in four blocks across the Ruapehu and Rangitikei districts in the central region of the North Island and the Hurunui district on the South Island, and includes an established forestry business.

The estate is being offered as either a share or asset sale via an international deadline sale process on behalf of the Soper Wheeler Company, the parent company of the New Zealand Redwood Company and a well-established California-based forestry company. Arotahi Agribusiness is conducting a two-stage global sale process with offers being accepted during stage one until June 9, 2022, and stage two involving detailed due diligence and contract negotiations with remaining shortlisted parties.

Consisting of an iconic species with high growth rate and exceptionally long life span, 3,166 hectares (7,823 acres) of the estate have already been planted over the course of the past 20 years, creating the foundation for established redwood forests.
“The New Zealand Redwood Company has undertaken significant investment over the past two decades into establishing a clear and credible path to establishing its redwood forests,” said Keating. “Thanks to the efforts of long-serving local management, a robust plan is in place to grow the estate supported by a ‘standing consent’ from the Overseas Investment Office.”

The estate is being offered with a developed business plan in place and seedlings made available to plant between 2022 and 2024 on some of the best land included in the asset, which has benefited greatly from New Zealand’s near ideal growing conditions together with 100 years of U.S. patent company experience and genetic selection, according to Wyatt Johnston, director, Arotahi Agribusiness.

“This is an estate of premium, hardy species with recognized high growth and long rotation, which is much less susceptible to windthrow or fire damage than pine,” said Johnson. “It also produces much higher value timber and sequesters significantly more carbon over its life cycle compared with pine.”

Although redwoods account for less than 1 percent of New Zealand’s planted forest estates of 1.79 million hectares (4.4 million acres), which is dominated by radiata pine, redwoods have thrived in the country where the climate has proven to be ideal.

“New Zealand’s temperate climate and rainfall have already proved to be highly suitable to establishing redwood forests,” noted Johnson, “with growth rates outperforming its native California.”

~ Lynda Kiernan-Stone is editor 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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