Gunns' plantations sold

TIMBERLAND investor New Forests, which has its headquarters in Australia, has taken controlling interest of the 46,000ha Auspine estate in the South East and western Victoria.

Funds management by New Forests is the lead investor in the significant transaction, which includes land and trees of the 64-property estate formerly owned and managed by Gunns Limited.

While New Forests will not release its financial stake in the sale, it revealed yesterday national woodchipper Gunns has retained a $120m stake in the asset.

Auspine - a market leader in domestic structural wood products - is the second largest softwood plantation asset in the Green Triangle, which is considered to be one of Australia's premier timber producing regions.

New Forests is also one of eight companies across the world that lodged expressions of interest to purchase the harvesting rights of ForestrySA assets.

New Forests managing director David Brand said the investment would deliver stable long-term ownership of the estate and reflected the potential for institutional capital to support Australia's forest sector.

Explaining "little" would change on the ground, he said the bulk of the timber would continue to be delivered to the Tarpeena mill.

"It will be business as usual," said Mr Brand, who explained local contractors would be used to undertake the operational work in the plantations.

Mr Brand said Gunns had also obtained some ownership of the asset, worth about $120m.

The timber company chief said funds managed by New Forests would take ownership of the assets in a second stage of the sale.

Describing the Green Triangle as Australia's premier plantation region, he said the region was attractive to institutional investors who wanted long-term investments with little risk.

"It is something they can hold and re-grow forever with very little risk," Mr Brand said.

He said New Forests had also not ruled out expanding the forestry estate or investing in new innovation.

"Institutional investors are increasingly seeking real assets such as timberland - particularly opportunities like the Auspine assets that offer a steady cash yield from sustainable timber harvest - as part of their investment programs," Mr Brand said.

Under New Forests' management, he said the estate would continue to supply local processing mills for domestic structural timbers through long-term agreements, as well as support local businesses providing property management, harvest, and transport activities.

"The Auspine estate is a great addition to New Forests' growing Australian timberlands portfolio and will enable us to seek improved efficiencies and added value from managing a comprehensive portfolio of properties across the productive Green Triangle region," Mr Brand said.

He said New Forests managed about 375,000ha of plantation land and timber plantations across Australia and the company had more than $1.25b in assets under management in Australasia, tropical Asia Pacific and the United States.

Mr Brand said the South East and western Victoria estate consisted of radiata

pine plantation in a region with a track

record of producing high-quality softwood timber.

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