Australia-based forestry investor New Forests has closed a A$700 million (NZ$803m) investment fund after agreeing to sell its remaining New Zealand forestry assets to Europe’s largest pension fund manager, APG.
New Forests said its Australia NZ Forest Fund 2 (ANZFF2) had signed agreements to sell its final New Zealand holdings, comprising two large forestry estates in Otago. The transaction, announced this week, is subject to regulatory approval.
New Forests is one of Australia’s largest forestry investment managers and a significant forest owner in New Zealand. According to Overseas Investment Office records, the company has purchased about $1.28 billion worth of New Zealand land since 2016.
The sale includes a 38% stake in Taieri Forests Limited (TFL), one of Otago’s largest softwood log producers, along with full ownership of Otago Estate Limited (OEL). Records show that in 2021, TFL paid $251 million for Wenita Forest Products, which owned 5,814 hectares of freehold land and 23,368 hectares of forestry rights. New Forests held a 38% stake in TFL at the time.
New Forests said TFL manages 24,700 hectares of plantable land, largely radiata pine with some Douglas fir. The forests are located close to local sawmills and have road and rail access for export markets.
OEL covers 22,550 hectares, with about 18,900 hectares of productive forest, much of which supports TFL operations. The Otago–Southland region is New Zealand’s second-largest forestry area, with 233,000 hectares of forest, accounting for 43% of the South Island’s total.
New Forests said that since acquiring the assets in 2018, ANZFF2 had worked to boost log sales, improve operational efficiencies, register carbon projects and protect high-conservation areas.
“The fund had reached the end of its 10-year life and delivered double-digit returns for investors, while demonstrating long-term sustainability outcomes,” New Forests spokesman David Shelton said.
APG Asset Management spokesman Ben Avery said the forestry assets aligned with long-term investment objectives.
“Forestry continues to play a critical role in decarbonisation and biodiversity conservation, and this transaction reflects our commitment to natural capital investments that deliver sustainable outcomes for our client, ABP.”