APG Asset Management has bought two New Zealand forestry plantations from the A$700m (€398m) Australia New Zealand Forest Fund 2 (ANZFF2), a fund managed by New Forests.
The sale includes a 38% interest in Taieri Forests Limited (TFL), one of the largest producers of softwood logs in the Otago region of New Zealand, and 100% of the assets of Otago Estate Limited (OEL), located in the Otago region.
Ben Avery, senior portfolio manager, private natural capital at APG Asset Management, Asia-Pacific said: “We are pleased to invest in these high-quality forestry assets in New Zealand, which offer both strong long-term returns and meaningful environmental benefits.
“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.”
David Shelton, managing director, Australia and New Zealand and global head of investments at New Forests, said ANZFF2 had reached the end of its 10-year term “We have been able to deliver strong double-digit returns for our investors, and demonstrate long term sustainability outcomes.”
APG had also bought a third of Forico, a forestry business in Tasmania, which was the cornerstone asset of ANZFF2, in 2023.
Shelton said: “Forestry is a significant segment in the New Zealand economy, contributing 1.3% of GDP. Long-term ownership of these assets supports responsible forest management, biodiversity conservation, and carbon sequestration for the future of New Zealand. We are confident the new owners will continue this investment pathway and enjoy attractive returns on their investment.”
Since acquiring these assets in 2018, New Forests’ ANZFF2 has worked to deliver strong operational improvements, including to increase sales volumes, enhance operational efficiencies, register carbon projects and protect high conservation areas. The fund also supported community programmes such as school education at the Orokonui Ecosanctuary.
The Otago-Southland region is New Zealand’s second largest plantation and forestry region with 233,000 hectares of forest area, representing 43% of the South Island of New Zealand’s total forest area.
TFL, which has 24,700 hectares of plantable area, comprising 92% Radiata Pine and 8% Douglas Fir, is located close to local sawmills and established road networks to ports and railways for export sales.
OEL is a large-scale freehold softwood land estate, spanning an area of 22,550 hectares including approximately 18,900 hectares of productive area, which underpins a significant proportion of the TFL forestry assets.
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