Sydney-based timber investment firm New Forests sees $5 billion of acquisition opportunities in Australia and New Zealand over the next three years. The firm, which has agreed to buy Gunns’ Plantation assets for $330 million has studied every plantation asset in Australia and New Zealand and has developed a plan to acquire some of the 4 million hectares of timber assets across the two countries. In February New Forests raised a $707 million fund for timber acquisitions. Net returns, post fees, and costs of 8% per year are expected. Australian timber is mixed hardwoods and softwoods while New Zealand’s are softwoods – both are exported to China. David Brand, New Forests’ chief executive, expects there will be a significant tightening of global timber supplies after a significant portion of Canada’s pine forests have been experiencing a beetle epidemic and a lack of investment in Siberia’s infrastructure has caused a decline in timber supplies from Russia since 2007. Mr. Brand declined to list any specific acquisition targets or if New Forests was seeking to buy FEA’s assets of 46,000 hectares in Tasmania and northern New South Wales.
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