Forest offers alternative crop

2:39 PM Friday September 14, 2018 True Commercial

A section of Te Kapua forest, about 18km southeast of Whakatane. Photo / Supplied

A large, professionally managed forest with an alternative crop of exotic tree species is for sale in the Eastern Bay of Plenty.

Located about 18km southeast of Whakatane, Te Kapua forest is a 687ha landholding with a net stocked area of 443.5ha.

The crop is mainly a mixture of cypresses, cedar and redwood, with all species managed through a pruning regime resulting in high-quality woodlots.

Colliers International forestry specialists Warwick Searle and Angus Robertson are marketing the freehold property for sale by a two-stage expressions of interest campaign.

Searle says it is a chance for investors to acquire a high-quality forest with superb proximity to international markets.

“Te Kapua Forest is only 105km from the modern and highly efficient Port of Tauranga, which is New Zealand’s largest port by export numbers.

“Most of the crop is likely to be exported, with a small amount able to be processed at Tauriko Sawmill on the outskirts of Tauranga.

“Astute prospective purchasers will appreciate the alternative nature of the crop, which has the potential to deliver substantial returns come harvest time.

“The forest has been professionally managed under a pruned regime, with the trees in excellent health.

“Significant roading infrastructure is already established throughout the forest due to the previous rotation harvest.

“The forest also offers alternative income streams, with the ability to claim carbon credits and draw rent from a forestry right agreement.

“This is an excellent opportunity to acquire a premium forestry investment that’s a bit different from your usual radiata pine crop.”

Te Kapua Forest is accessed via Stanley Rd, which runs adjacent to the forest’s western boundary.

Stanley Rd connects with State Highway 2 about 13km south of Whakatane. An alternative main route to Whakatane is available via Wainui Rd, 9.5km to the north of the forest gate.

Robertson says the Eastern Bay of Plenty region is well set up to support the forestry industry.

“The region has multiple roading, silviculture, harvesting, and transport contractors,” he says.

“Growing conditions are highly favourable, with Whakatane ranking among the sunniest towns in New Zealand. It receives about 2332 of annual sunshine hours.

“The area also benefits a significant amount of rainfall throughout the year totalling 1,207 mm annually.”

Robertson says Te Kapua Forest comprises four main species – Mexican cypress, Ovens cypress, redwood and Japanese cedar.

“The tree crop is in good health with a green colour and no significant health issues,” he says.

The stands have been established at about 1000 stems per hectare, with survival rates ranging from 90 to 96 per cent in each stand.

The forest has been managed under a pruned regime, with the crops planted between 2005 and 2007 receiving four lifts to approximately 6.5m and thinned to about 400 stems per hectare

Searle says the results of the silviculture regime have been an outstanding woodlot that will see exponential growth in value from now until harvest.

The forestry rights to 40.5ha of the landholding are owned by the Ontario Teachers’ Pension Plan, which pays $8,298.55 including GST in net annual rent.

The rights expire on March 31, 2022, or at completion of the felling of the exotic trees.

The land is required to be left in a clean and tidy condition, suitable for replanting in trees, with all debris contained within the outside row of stumps. There are no replant obligations.

Searle says 535ha of the forest is formally classified as post-1989 under the New Zealand Emissions Trading Scheme (ETS), providing additional income for the investment.

“The ETS helps New Zealand to meet its international climate change obligations by putting a price on greenhouse gasses and creating incentives to reduce emissions and increase tree planting.

“Te Kapua Forest’s vendor has claimed 144,061 units that are held in their New Zealand Emissions Trading Register account. All units are to be transferred to the new owner on settlement.”

Expressions of interest are to be submitted to Colliers by 4pm on September 27.

Shortlisted parties will be confirmed by a target date of October 5, followed by a due diligence, final offer and preferred party selection process.