A Mirvac Group-run fund has offloaded a portfolio of forestry assets once leased to Timbercorp worth about $60 million to acquisitive fund manager New Forests. Sources: The Australian, Timberbiz, ABC News
The assets, which comprise 21,000ha of prime forestry land, will seed New Forests’ new fund, Australia New Zealand Forest Fund 2.
“This purchase is an ideal initial transaction for our new fund. It provides immediate cash yield from land rental and gives the fund entry into two key timberland regions of Australia,” New Forests chief executive David Brand said.
“The hardwood woodchip primarily goes to Japan and China and the Chinese market certainly has been very strong over the last six months and is certainly growing.
“Looking at the pulp and paper facilities being constructed up there, we think the market should expand by 20 per cent over the next couple of years.”
Brand said about two-thirds of the estate is leased to a single third party.
“We’re sort of seeing an evolution in forestry in Australia … towards long-term, stable institutional ownership which will let us really move forward in terms of investing in assets and expanding productivity in markets,” he said.
The estate includes 68 separate properties, 61 of which are in the productive Green Triangle border region of Victoria and South Australia.
A further seven sites are in southwest Western Australia.
The Mirvac-managed fund, Australian Sustainable Forestry Investments, bought the portfolio from Timbercorp in 2004 and emerged as its largest landlord after the timber group’s collapse in 2009.
Mirvac was also one of three investors in the fund. The deal is part of Mirvac’s process to exit a clutch of funds holding assets deemed by the firm as non-core.
New Forests has raised $707m for its new fund and has circled Forest Enterprises Australia as well as some forestry assets being sold by the receivers to Gunns.
