New Forests seen as frontrunner to purchase Forest Enterprises Australia after closing AU$707M investment fund for timber assets in New Zealand, Australia; speculation mounts that Sydney-based company plans to 'pounce' on Gunns plantations

Wendy Lisney

March 18, 2014 (The Australian) – AUSTRALIAN manager New Forests has raised $707 million for a fund to be seeded with timber assets, including a portfolio of properties being offloaded by Mirvac Group, and its likely purchase of Forest Enterprises Australia.

The size of the raising has led to questions as to whether New Forests is also ready to pounce on the forestry plantations of Gunns being offloaded by receivers.

There is about $700m of Australian forestry assets currently on the market.

New Forests chief executive David Bland would not comment on possible acquisitions but said the driving force behind the capital raising was demand from institutional investors.

``The timber plantation base of Australia and New Zealand has been steadily evolving over the past 15 years from government, corporate and retail-managed investment-scheme ownership to largely institutional ownership,'' he said.

New Forests has already been named as the frontrunner to purchase Forest Enterprises Australia, which owns 46,000ha in NSW, Queensland and Tasmania said to be worth between $200m and $400m.

It is also expected to buy Mirvac's portfolio of close to 70 properties that were once leased to collapsed forestry group Timbercorp.

Queensland's Ergon Energy is also looking to offload a portfolio of forestry properties valued at about $20m.

New Forests was established in 2005 and managed $2.3 billion of forestry, rural land and environmental markets investments. The company has offices in Sydney, Singapore and San Francisco. The new fund -- Australia New Zealand Forest Fund 2 -- will have a mandate to buy both hardwood and softwood timber plantations in Australia and New Zealand.

The Sydney-based group purchased Great Southern's land bank for $415m in 2010.



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