Forestry investment giant Global Forest Partners appears ready to harvest another big Australian asset, this time calling in advisers to sell some of its holdings in New South Wales. Source: Australian Financial Review
Fresh from seeing strong demand for its Green Triangle Forest Products business in South Australia/Victoria, the American forestry bigwig has started testing buyer interest in its Hume Forests Ltd, a maturing softwood plantation estate located in the Murray Valley and Oberon regions in southern NSW.
Interested parties were told Hume Forests had about 19,000 hectares of freehold land and was situated nearby to state-owned Forestry Corporation of New South Wales’ plantations and land held by other well-known private operators, including Sydney-based specialist fund manager New Forests.
It’s also close to a bunch of processing businesses including Visy, AKD, Hyne, and Borg.
Potential bidders said the deal was pitched as something actionable in the near term unlike Forestry Corp’s mooted privatisation, which has been kicked down the road a few times and a portfolio large enough to attract global real assets investors looking to deploy capital.
GFP, which has about $US3.3 billion in assets, acquired Hume Forests Ltd in 2004 for one of its timber funds.
It is understood the forestry manager tapped boutique Resolute Advisory to handle the sale, the same firm that stitched up its Green Triangle exit, which was Australia’s biggest ever forestry deal. [Green Triangle included more than 22,000 hectares of managed land and a mixed-age portfolio of radiata pine forests, one of the big sources of saw-log supply.]
Hume Forests’ auction is expected to attract the same sorts of suitors as Green Triangle, which sold for about $775 million mid last year.
Insurance giant AXA IM won that auction, joining the Future Fund-backed OneFortyOne Plantations and New Forests in the area.
Underbidders include forestry managers and private capital investors, keen to deploy dry powder for sustainable real assets that can produce reliable cash flows.
It comes as investors also re-think forestry as an asset class following recent changes to Australia’s carbon legislation, which has created additional potential revenue streams.
There’s also demand for lumber from a booming housing construction sector, and supply chain issues in offshore markets, all of which has investors looking for hedges against inflation.
