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Canadians buying up Australian & NZ assets

Canada’s Public Sector Pension Investment Board could swoop on one of Australia’s most valuable timber plantations, with sources saying about $1 billion worth of forests owned by Hancock Timber Resource Group are on its radar. Source: The Australian

PSP executives have been in Sydney sounding out counterparties ahead of what some say is shaping up to be an aggressive acquisition spree by the Canadians focusing on Australian property, agriculture and billions of dollars’ worth of upcoming infrastructure assets for sale by federal and state governments.

It is understood a major Australian acquisition is on the cards by PSP and the seller it is engaged with is Hancocks.

Recent forestry portfolios placed up for sale have struggled to secure strong prices, but the industry is now shaking off pain from weaker industry demand and collapsed managed investment schemes, which could see some plantations sell for some more bullish prices, with an increasing appetite for timber from woodchip markets.

In recent months, Forest Enterprises Australia was sold by receiver Deloitte on behalf of investors to RMS for between $125m and $150m, far below some expectations of up to $400m.

PSP has Can$94bn ($97bn) worth of assets under management globally and typically partners with listed real estate fund manager Charter Hall when it buys Australian property, including last year’s $266m purchase of the shopping mall Westfield Innaloo in Western Australia.

Some months ago, PSP waded into the nation’s agricultural industry with the purchase of northern Australian cattle farms worth about $100m.

Across the Tasman, PSP is finalising the purchase of forest plantations from Harvard Management in conjunction with New Zealand Superannuation and local Iwi tribes worth NZ$2.35bn ($2.15bn), and recently outlaid more than NZ$1bn for the acquisition of AMP’s office portfolio.

Boston-based HTRG is the world’s largest timber investment manager for institutional investors, developing and managing about US$12.1bn ($14bn) worth of globally diversified timberland portfolios for public and corporate pension plans, high net-worth individuals and foundations and endowments.

Fourteen percent of its portfolio is located in Australia, much of which was the plantations it purchased in recent years from the Victorian government.

It snapped up plantations in Queensland several years ago for around $603m. Its markets are the US, Canada, Australia, New Zealand, Brazil and Chile.