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Hancock Timber Resource Group Acquires 25,000 Acres of Timberlands in Alabama

Hancock Timber Resource Group Acquires 25,000 Acres of Timberlands in Alabama | Timberland Investment | Scoop.it

The Hancock Timber Resource Group has completed the acquisition of approximately 25,000 acres of timberlands in Alabama from Rayonier Inc.

 

This transaction is a follow-on to another transaction completed in late 2016 where Hancock Timber acquired approximately 37,000 acres of timberlands in Mississippi and Alabama from Rayonier.

"We are very pleased to secure additional high quality timberlands for our clients," said Hancock Timber Resource Group President Brent Keefer. "These properties are located in an area of the US South with deep and diverse markets for forest products. We will be able to supply solid wood and fiber to a variety of facilities in southern Alabama, western Georgia, and northern Florida. We look forward to managing them to their highest potential."

 

As with the previous acquisition, the timberlands are stocked with well-managed southern pine plantations and hardwoods. The timberlands will be managed by Hancock Forest Management, the organization's integrated property management group. Hancock Timber has approximately 280,000 acres of timberland under management in Mississippi and Alabama, 1.8 million acres in the US South and almost six million acres globally.

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Pope Resources Announces Timberland Acquisition

Pope Resources Announces Timberland Acquisition | Timberland Investment | Scoop.it
Pope Resources (NASDAQ: POPE) announced today that it has entered into a definitive agreement to acquire approximately 7,300 acres of timberland in western Washington for $31.9 million from a client of Hancock Timber Resource Group. The acquisition will be financed with a new credit facility and closing is expected to occur in the third quarter of 2016, contingent on obtaining such financing.

"We like what this transaction represents in terms of species mix, age class distribution, ease-of-operability, and accretive cash flow," said Tom Ringo, President and CEO.  "An added plus is how the property folds neatly into our existing timberland management infrastructure due to its proximity to other lands we already own and manage."
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Sumitomo buys Nelson forests from Hancock

Sumitomo buys Nelson forests from Hancock | Timberland Investment | Scoop.it

Giant Japanese company Sumitomo has bought out Hancock Forest Management's 30,000 hectares of Nelson region [NZ] pine forests in a $370 million deal that gives its big Richmond timber processing plants long-term security of supply.


Sumitomo is 100 per cent owner of Nelson Pine Industries (NPI), which produces large export volumes of medium-density fibreboard (MDF) and laminated veneer lumber (LVL) from its sprawling site just outside Richmond.


The purchase was concluded just before Christmas and was still subject to Overseas Investment Office approval, NPI managing director Murray Sturgeon said.
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Hancock, a huge US-based forestry investor and management company, had decided to sell its South Island forests "because their term was up for that investment", Sturgeon said. "So it was going to be sold, and we encouraged Sumitomo to support the bid."
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Nelson MP Nick Smith said Sumitomo had always felt a vulnerability around the supply of wood to its investment of more than $800m in its Nelson plant.


Sumitomo was one of the more constructive long-term investors in the New Zealand economy and he wouldn't foresee "major difficulty" in getting OIO approval for the buyout.

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Plum Creek Completes Sale of Southern Timberlands

Plum Creek Completes Sale of Southern Timberlands | Timberland Investment | Scoop.it
SEATTLE, Sep 18, 2015 (BUSINESS WIRE) -- Plum Creek Timber Company, Inc. PCL, +0.51% today announced it has completed the sale of approximately 98,000 acres of timberlands in west-central Florida to Hancock Timber Resource Group for approximately $120 million.

“We are pleased to conclude this transaction with Hancock Timber which will continue to operate these lands as working forests,” said Rick Holley, chief executive officer. “The agreement allows our company to take advantage of a market opportunity and reflects our long-term strategy designed to upgrade the value and productivity of our timberland portfolio over time through the identification and sale of non-strategic lands. While these lands have been well-managed, the significant hardwood component of the property didn’t fit well with our broader Southern timberland portfolio.”
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Moody's upgrades TimberStar's certificates on new timberland appraisal

Moody's upgrades TimberStar's certificates on new timberland appraisal | Timberland Investment | Scoop.it

Moody's Investors Service has upgraded the ratings on the certificates issued by TimberStar Trust I, a securitization of approximately 900,000 acres of timberlands in Louisiana, Texas and Arkansas. Hancock Timber Resource Group (HTRG), a division of Hancock Natural Resource Group, Inc., manages the property on behalf of its investors. Hancock Natural Resource Group is a wholly owned subsidiary of Manulife Financial Corporation.
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The rating actions are prompted by the growth in the valuation of the timberlands collateral for this transaction. The most recent appraisal report provided by Sizemore & Sizemore valued the timberlands at approximately $1.5 billion, a 27% increase from the market value of $1.18 billion at deal closing. The higher valuation has resulted in a stronger loan-to-value (LTV) ratio, which represents the outstanding balance of the certificates to the appraised value of the timberlands, for each class of the certificates. Although the transaction's cash flows have been weaker than Moody's expected because HTRG has intentionally reduced the amount of timber it harvested during a period of weak demand for timber and timber prices (caused by the collapse of the housing market during the recent recession), the value of the underlying timberlands has continued to increase. In addition, in anticipation of new housing construction activities returning to the historical norms of approximately 1.5 million homes per year, investors have shown growing interest in the timberlands market. This interest improves liquidity of the timberlands and the ability of HTRG to sell the timberland collateral in a relatively short time if needed.

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Bill Peressini Named President Of Hancock Natural Resource Group

Bill Peressini Named President Of Hancock Natural Resource Group | Timberland Investment | Scoop.it
Bill Peressini has been named President of the Hancock Natural Resource Group (HNRG), Chief Executive Officer Dan Christensen said today.

Mr. Peressini, HNRG's Chief Financial Officer, assumes the role of president, previously held by Mr. Christensen, who will remain as CEO. He and Mr. Peressini will jointly lead HNRG moving forward. The appointment is effective immediately. Mr. Peressini will also continue as CFO until September 30, 2015.
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Enviva and Hancock Natural Resource Group Partner to Develop Industrial Wood Pellet Projects in the Southeastern U.S.

Enviva and Hancock Natural Resource Group Partner to Develop Industrial Wood Pellet Projects in the Southeastern U.S. | Timberland Investment | Scoop.it
Enviva Holdings, LP and John Hancock Life Insurance Company announced today that they have partnered to develop industrial wood pellet production plants and marine export terminals in the southeastern U.S. 

Through their affiliates, Enviva Development Holdings, LLC ("Enviva") and Hancock Natural Resource Group, Inc. ("HNRG"), the companies have committed to invest up to an aggregate of $320 million in equity capital in Enviva Wilmington Holdings, LLC (the "Joint Venture").

The Joint Venture plans to construct an industrial wood pellet production plant in Sampson County, North Carolina, a marine export terminal at the Port of Wilmington, North Carolina, and potentially other wood pellet plants and marine terminals in the southeastern U.S.  Enviva will serve as the managing member and operator of the Joint Venture.  The Joint Venture expects to commence construction of the Sampson plant and Wilmington terminal later this month.  Wood pellet production from the Sampson plant will be exported through the Wilmington terminal under long-term contracts with major European power generators.  The Joint Venture's customers are replacing coal with wood pellets to improve the environmental profile of energy generation.
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CatchMark buys Louisiana timberlands from Hancock

CatchMark buys Louisiana timberlands from Hancock | Timberland Investment | Scoop.it

CatchMark Timber Trust Inc. bought 21,300 acres of timberland in southwest Louisiana from Hancock Natural Resource Group for $38.5 million.


With this purchase, the Atlanta-based real estate investment trust has acquired this year 121,500 acres of timberland throughout the South, expanding its timberland holdings by 44 percent and increasing its projected annual harvest volume in the range of 49 percent to 55 percent, or 540,000 to 590,000 tons.

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Hancock to sell conservation easement on 9,000 acres near Klickitat River

Hancock to sell conservation easement on 9,000 acres near Klickitat River | Timberland Investment | Scoop.it

When a huge swath of forestland along the Klickitat River is formally secured for conservation by next year, it won't just be environmental advocates celebrating.


Protecting some 14 square miles of land — about 9,000 acres — also has the backing of local leaders and federal lawmakers from both parties. Spearheading the effort is the Columbia Land Trust, a nonprofit based in Vancouver.

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The land won't have to change hands to be protected. A nearly $4 million grant will allow the state Department of Natural Resources to secure the area by purchasing a conservation easement, Kearney said.


The move will extinguish development rights and assures that none of the landscape will be lost to second homes or resorts — a real threat in forestlands across the country, including Washington, according to the land trust. But it also keeps the area in working forestry, allowing timber harvests to continue. The land is privately owned by Hancock Natural Resource Group.


"It doesn't erode that economic resource," Kearney said, noting recreational assets are also preserved. "It keeps the traditional access for hunting and fishing."


Like many of the Columbia Land Trust's efforts, the Klickitat Canyon Working Forest project has been years in the making. The organization wrote a grant proposal in 2012, and learned earlier this year that it had netted $3.975 million from the Land and Water Conservation Fund, through its Forest Legacy Program.


DNR is just beginning the process of acquiring the easement that will conserve the land. The transaction will likely be complete in 2015, Kearney said.

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CatchMark Completes $74 Million Acquisition of Timberlands in Georgia and East Texas

CatchMark Completes $74 Million Acquisition of Timberlands in Georgia and East Texas | Timberland Investment | Scoop.it

CatchMark Timber Trust, Inc.  announced today the completion of its transaction to purchase 36,300 acres of timberland (known as the Waycross-Panola properties) located in Southeast Georgia and East Texas from Hancock Timber Resource Group for approximately $74 million.


The acquisition adds approximately 1.45 million tons of merchantable timber to CatchMark's inventory and increases the share of higher value chip-n-saw and sawtimber in the company's product mix. Comprising 84% pine plantations by acreage and 54% sawtimber by tons, the Waycross-Panola properties are expected to add approximately 180,000 to 200,000 tons to CatchMark's annual harvest volumes over the next decade.

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Stars align for NZ foresters as 'wall of wood' comes on stream, prices reach record highs

Stars align for NZ foresters as 'wall of wood' comes on stream, prices reach record highs | Timberland Investment | Scoop.it

New Zealand forest growers, long overshadowed by booming returns from the dairy industry, look set to cash in on record prices for logs as they prepare to harvest trees planted in a flurry of activity two decades ago.


Forestry plantation activity in New Zealand jumped between 1992 and 1998, as a surge in Asian log prices lured investment syndicates to the sector. Radiata pine, which makes up about 90 percent of the nation's plantations, are typically felled between 26 and 32 years, meaning the "wall of wood" will start being harvested from about 2018, according to government figures.
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China is underpinning New Zealand commodity price strength as Asia's largest economy undergoes urbanisation, growing incomes and demand for better housing, says ASB rural economist Nathan Penny.


Forestry exports to China rose more than 50 percent in 2013, putting New Zealand ahead of Russia as the biggest seller of logs into that market. Russia's log exports have dipped as a result of an export tax aimed at stimulating its domestic timber processing industry. At the same time, shipments from the US and Canada have dwindled as demand picked up in their home markets.
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While an increase in supply in coming years may put some pressure on prices, foresters have the ability to stagger harvests and continued Chinese demand is likely to underpin the sector, Penny said.
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Increased demand in New Zealand from the rebuilding of earthquake damaged Christchurch and a surging Auckland housing market are also adding to wood demand and supporting prices, Penny said. New Zealand exports of logs and wood surged 22 percent last year to $3.86 billion. In comparison, meat exports rose just 2.2 percent to $5.28 billion and dairy exports increased 17 percent to $13.4 billion. The Wood Council of New Zealand, which represents forestry and wood processors, aims to triple export earnings to $12 billion by 2022.

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The New Zealand Superannuation Fund partnered with Harvard Management Company, the endowment fund of Harvard University, and the Public Sector Pension Investment Board, Canada's largest pension investment managers, for the harvesting rights to the 178,000 hectare Kaingaroa Forest, New Zealand's largest plantation forest and one of the largest contiguous plantation forests in the Southern Hemisphere.

The NZ Super Fund valued its 41.25 percent stake in Kaingaroa at $1 billion as at June 30, saying it has delivered an 18.05 percent return since it was purchased in 2006.


Other large plantations are owned by US-based Hancock Natural Resource Group, the world's largest timberland investment manager which bought 260,000 hectares of forests from Carter Holt Harvey, and Matariki Forests, a consortium managed by US-based Rayonier which owns 130,000 hectares of forests, according to Forest Owners Association records.


Demand for logs from China is hurting the local sawmilling industry as forest owners send their logs overseas rather than sell them to local processors, according to the New Zealand Timber Industry Federation.


Some 40 sawmills have closed since 2003, according to the New Zealand Forest Owners Association. In October, the Tachikawa Forest Products sawmill in Rotorua was put in receivership with the loss of 120 jobs.

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Jones hits out at 'arrogant' forest owners

Jones hits out at 'arrogant' forest owners | Timberland Investment | Scoop.it

Labour's outspoken economic development spokesman Shane Jones has lashed out at "arrogant" foreign owners of New Zealand's forests, saying their pursuit of the highest possible profits comes at the expense of local workers, communities and the wood processing industry.


Jones' comments come as he and industry figures ring alarm bells that local processors are being priced out of the log market as skyrocketing Chinese demand drives prices higher.


"There's a hell of a lot of fear now in the wood processing sector that they cannot secure adequate contracts that give them affordable and durable supplies," Jones said. "It's got to the point that the viability of their businesses is being threatened.

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He pointed the finger at the foreign-owned timber management organisations (timos) which own much of New Zealand's forests including US company Hancock.


"The timos, in particular Hancock, have become arrogant," he said. "They're flicking away all the domestic New Zealand producers and they're chasing the speculative Asian market."

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New Zealand exported a record 3 million cubic metres of logs to China in the September quarter, a 40 per cent increase on the same period a year earlier and log prices approached record highs during the period.

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Hancock did not return the Herald's calls but Forest Owners Association president Paul Nicholls said owners were looking for the best return on their investment.


"Most forest owners sell somewhere between half and two thirds of their product to domestic mills but there's always competition for those logs from overseas buyers, so it does come down to a matter of economics, which markets the domestic mills are selling into and what they can afford to pay for logs."


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Forest Investment Associates and The Molpus Woodlands Group Acquire 295,000 Acres of Timberland from the Hancock Timber Resource Group

Forest Investment Associates and The Molpus Woodlands Group Acquire 295,000 Acres of Timberland from the Hancock Timber Resource Group | Timberland Investment | Scoop.it

Forest Investment Associates (“FIA”) and Molpus Woodlands Group (“Molpus”), two timberland investment management organizations, today announced the joint purchase of approximately 295,000 acres of timberlands in Arkansas and Texas from the Hancock Timber Resource Group (“HTRG”).

 

The property was originally part of HTRG’s acquisition from TimberStar in 2009. Primarily consisting of high-quality pine plantations, the timberlands provide timber products to industry leaders including International Paper, West Fraser and Georgia-Pacific through long-term supply agreements that have been in place since 2006. FIA’s clients acquired approximately 146,500 acres in the states of Arkansas and Texas and Molpus’ clients acquired approximately 148,500 acres in the same states, and each acquisition will be separately managed by FIA and Molpus.

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UniSuper turns timberland around, increases allocation

UniSuper turns timberland around, increases allocation | Timberland Investment | Scoop.it

UniSuper’s failure to sell its $400 million timberland portfolio five years ago led it to change strategy so the investment could become a long-term hold instead. The success of that strategy has convinced the fund to invest a further $200 million into the portfolio.


Originally the fund wanted to completely sell the portfolio to free up capacity for illiquid investments, particularly as it had an extensive private equity portfolio (approximately $2.5 billion) and was bidding on the Port of Brisbane.


“The timber assets were considered as the best target to free up capacity based on a number of factors including fee arrangements, governance issues, OH&S [occupational health and safety] risk and the poor performance of the sector at that stage,” said Kent Robbins, head of property and private markets at UniSuper.


The fund had received “attractive offers” on two of its three timber assets, but its preferred purchaser was not willing to acquire the third, based on structural issues.
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The ongoing investment into timberland has a current yield of approximately 7 per cent with a forecast internal rate of return of more than 11 per cent. In addition, the existing exposure to the asset has generated a return of 12 per cent per annum over the past five years.


Robbins put the “overarching success” down to one concept; partnership. “We really did take a view that we are partners with our manager, partners with our nominee directors. It wasn’t simply acceptable for us to say we want better outcomes to OH&S, we had to be part of the solution.”

OH&S was one of the biggest concerns, as timberland has been an industry where if something goes wrong it can be catastrophic – but the fund refused to accept it had to be that way.


UniSuper used its position as a large super fund to gain access and learn from some of the best firms in Australia, in particular how mining businesses had improved outcomes.


“It really did involve UniSuper being willing to participate and being willing to provide resources and insights,” Robbins said, adding that the board and the manager, Hancock, have made huge inroads into improving the OH&S outcomes.

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Campbell Global Acquires 100,000 Acres of Forest Property in Washington’s Puget Sound Region

Campbell Global Acquires 100,000 Acres of Forest Property in Washington’s Puget Sound Region | Timberland Investment | Scoop.it

Campbell Global has completed the purchase of over 100,000 acres of timberlands in the Puget Sound region of Washington state. The property is located east of Seattle and was previously managed by the Hancock Timber Resource Group.


The property, which has been well managed as productive timberland for many years, is comprised mostly of Douglas fir and Western Hemlock. The majority of the land base is also subject to a conservation easement that limits future development while it is also privately managed as a “working forest.”

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Bill Peressini Named Chief Executive Officer Of Hancock Natural Resource Group

Bill Peressini Named Chief Executive Officer Of Hancock Natural Resource Group | Timberland Investment | Scoop.it

Bill Peressini has been named Chief Executive Officer of the Hancock Natural Resource Group (HNRG), the company announced today. Mr. Peressini, whose appointment is effective on January 1, 2016, will replace Dan Christensen, who will be retiring at the end of the year after 23 years with the company, the last 12 as its CEO. Mr. Peressini also will join the HNRG Board of Directors.
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"We are thrilled to have Bill step into his new role as HNRG's CEO," said Warren A. Thomson, Chief Investment Officer of Manulife Financial and Chairman of Hancock Natural Resource Group. "Since joining us as chief financial officer four years ago, he has been an invaluable member of the team. He has played a vital role in the development of the Hancock Renewable Energy Group and in developing the integrated farmland investment management platform of the Hancock Agricultural Investment Group, two vital items for the future growth of HNRG."
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Upon his retirement, Mr. Christensen will continue as chairman of HNRG's subsidiary companies and will take on the role of Chairman of HNRG's Board of Directors. He will replace Mr. Thomson who is stepping down as chairman, but remaining on the board. Mr. Christensen also will continue to work in the natural resource industry with industry associations.


Mr. Peressini, who was named president of HNRG earlier this year, has been its Chief Financial Officer since joining the organization in 2011. Before coming to HNRG, Mr. Peressini held senior management positions at Stimson Lumber Company, a privately-held integrated forest products company, and PacifiCorp, an energy and telecommunications company. Both companies are based in Oregon.

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Hancock NZ upbeat on outlook for timber as local units post mixed results

Hancock NZ upbeat on outlook for timber as local units post mixed results | Timberland Investment | Scoop.it
Hancock Forest Management (NZ), the local division of the world's largest timberland investment manager, is confident about the outlook for New Zealand timber.
"The domestic market right now is on a pretty firm footing. There is some pretty solid construction activity in New Zealand right now," said Bill McCallum, general manager of Hancock's local unit, which sells 70 percent of its volume domestically. "We're very confident in the outlook for timber and New Zealand's ability to produce timber on a sustainable basis so our investors are confident about the outlook."
New Zealand residential building consents rose to a seven year high in 2014, led by the rebuilding of earthquake damaged Christchurch and a shortage of housing in the nation's largest city of Auckland, although residential consents have declined for the latest three months. Christchurch still appeared to be in the early phases of rebuilding with activity set to continue for some years, while building activity in Auckland would likely have to continue or strengthen to meet demand for housing, McCallum said.
Hancock, a unit of US based Hancock Natural Resource Group, is the largest owner or manager of planted forests in New Zealand, with more than 200,000 hectares of forest under management, according to industry figures published on the New Zealand Forest Owners Association website.
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Hancock, Boise mum on expiring forest contract

Hancock, Boise mum on expiring forest contract | Timberland Investment | Scoop.it

On Dec. 31, a guaranteed wood-supply contract originally inked between Boise Cascade Company and Forest Capital Partners that in 2012 was assumed by new landowner Hancock Timber will expire. Included in that massive, multi-state purchase were 148,000 acres of land in northern Wallowa County that for decades had been owned by Boise Cascade.


Representatives from Boise Cascade and Hancock Timber declined to comment about the contract situation, but Hancock Timber’s La Grande-based regional manager, Joe Justice, said the two firms will continue to do business with each other.
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Justice, who was hired by Boise Cascade in 2000 and has remained working on the same 300,000 acre “tree farm” in Northeast Oregon and Southwestern Washington as ownership has changed from Boise cascade to Forest Capital and now Hancock Timber, says a common misconception about those changes in ownership is that personnel making on-the-ground decisions on that large tract of land, half of which is in Wallowa County, changes with ownerships. “Walk in our office today,” says Justice, “and you’ll see many of the same faces as those working during Boise Cascade’s ownership. Local land knowledge is very important.”


One major difference between the ownership of Forest Capital and that of Hancock Timber deals with actual owners of the property. In essence, a large pool of investors owned Forest Capital, which owned the property and distributed earnings on investment proportionally. Hancock Timber, with land holdings all over the world, operates on a different business model, says Justice. Individual investors in Hancock Timber own individual tracts of land, and there are eight such investors that own land in Wallowa County. And yet those landowners are not individuals, but in most cases large pension funds that are reimbursed for investments according to earnings made off the individual tracts of land they own in Wallowa County.


Although Justice wasn’t at liberty to answer questions that delved into proprietary information matters, he did address Hancock Timber’s worldwide policy about cutting 2 percent of its holdings annually, forming a 50-year crop rotation, and whether that policy is being followed in northern Wallowa County.


Justice repeatedly stated that 2 percent of 300,000 acres is a large amount of timber to be cut in one year (6,000 acres to be exact) and, in his opinion, local worries on the matter arose from a circumstance of so many acres being clear-cut within sight from Highway 3, in northern Wallowa County. That area from Hancock’s purchase included an inventory of trees that needed to be harvested.

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Canadians have eye on $1bn of forestry assets

Canadians have eye on $1bn of forestry assets | Timberland Investment | Scoop.it
CANADA’S Public Sector Pension Investment Board could be about to swoop on one of Australia’s most valuable timber plantations, with sources saying about $1 billion worth of forests owned by Hancock Timber Resource Group are on its radar.

PSP executives have been in Sydney this week sounding out counterparties ahead of what some say is shaping up to be an aggressive acquisition spree by the Canadians focusing on Australian property, agriculture and billions of dollars’ worth of upcoming infrastructure assets for sale by federal and state governments.

It is understood a major Australian acquisition is on the cards by PSP and the seller it is engaged with is Hancocks.

Recent forestry portfolios placed up for sale have struggled to secure strong prices, but the industry is now shaking off pain from weaker industry demand and collapsed managed investment schemes, which could see some plantations sell for some more bullish prices, with an increasing appetite for timber from woodchip markets.

In recent months, Forest Enterprises Australia was sold by receiver Deloitte on behalf of investors to RMS for between $125m and $150m, far below some expectations of up to $400m.
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Manulife Turns to Agronomists and Foresters to Beat the Market

Manulife Turns to Agronomists and Foresters to Beat the Market | Timberland Investment | Scoop.it

Manulife, which has long invested in commercial real estate, farmland, oil and gas, private debt and timberland to support its insurance business, is now pouring resources into efforts to offer these asset vehicles to outside institutional investors and to develop new alternative products. All of its existing private markets businesses — representing about C$74 billion ($68.4 billion) in assets — have been brought under the remit of Kevin Adolphe, CEO of the new Manulife Asset Management Private Markets group.
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The insurer is hoping to take advantage of investors’ increasing interest in alternatives and private assets that can potentially provide more diversification, plus a liquidity premium — the return for holding assets like a forest that are hard to buy and sell.
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Daniel Christensen, CEO of Manulife’s Hancock Natural Resource Group, which includes timber, agriculture and renewable energy, stresses, however, that it takes time for investors to build quality portfolios out of specialized asset classes. “Investors need the patience because there are a finite number of opportunities out there,” he says. “We have to work hard to find ones that meet our criteria.”


Darien, Connecticut–based Casey Quirk & Associates expects that real assets such as real estate and infrastructure will see a big spike in search activity among institutional investors as they seek long-dated, unlisted investments that generate strong cash flows. Real assets already represent the most new searches for consultants this year — about 14 percent of what’s forecast, up from 6 percent in 2013.
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Boston-based Christensen joined John Hancock in 1992. Timber makes sense for insurance companies like Hancock, he explains, because its long duration can be matched against the liabilities of their life policies. Hancock got into the business in the mid-1980s as large-scale integrated forest companies — which had held the majority of timberland — started selling off property. Once that massive transformation took place, pension funds and others were able to invest.


Christensen says that timber is just one of many asset classes that were once off-limits to investors but have in recent years added significant returns to institutional portfolios. Trees, for instance, grow even during a recession. “We can grow our inventory in downturns and can wait for markets to return,” says Christensen, who worked as a forester for 15 years in Maine before joining Hancock. As the largest timberland holder in Australia and New Zealand, Hancock continued to market logs to China after the financial crisis, while in the U.S. it held on to its inventory and only now is releasing timber into the states where prices are high.


Hancock is also developing renewable-energy investments for Manulife’s general account from its farms and forests, including biofuels. Condensed wood pellets are burned like coal, for example, but are considered carbon-neutral. Christensen expects to offer these types of investments to third parties as well.


Christensen is a big believer in direct investments, even if they require specialized talent to run. He says that owning stakes in farms and forests provides a good balance to the mostly securitized assets in typical investor portfolios. “This doesn’t just happen by accident,” he adds. “You have to know how to farm, know how to grow forests.”

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New Forests to buy Gunns for about $330m

New Forests to buy Gunns for about $330m | Timberland Investment | Scoop.it

New Forests, a Sydney-based timber investment fund, has signed an agreement to acquire the forestry assets of the 139-year-old bankrupt Tasmanian timber company Gunns for about $330 million, reporting by Data Room has discovered.


New Forests, which raised a $707m fund to invest in Australian and New Zealand timber assets this year, beat out five other final bidders in a fiercely contested auction.


Four of the bidders only wanted the timber assets -- 175,680 gross hectares of freehold land incorporating 96,850 hectares of hardwood eucalyptus and 3,780 hectares of softwood radiata pine. Another two bidders were after a licence to build a pulp mill.


New Forests was not interested in bidding for the licence to build a pulp mill on a 650-hectare site.

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Established by former Hancock Natural Resource Group executive David Brand in 2005, New Forests manages about 450,000 hectares of land in Australia, the US and Asia, as well as about $2.3 billion in capital, according to its web site.
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Gunns was considered the last basket of timber that can be secured in a politically stable country. Other timber assets for sale in China or South America are viewed as risky investments because of the volatile political climate that has historically characterised those countries.

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Masisa Sells Forestland to Hancock for $203 Million

Masisa Sells Forestland to Hancock for $203 Million | Timberland Investment | Scoop.it

Masisa SA has reached an agreement to sell 62,000 hectares of its Chilean forestland to US Hancock Natural Resource Group for $203.6 million. News sources report the transaction is expected to be completed within the next two months.


A new company, NewCo, is being formed as part of the deal, with Hancock receiving 80 percent of the shares and Masisa the remaining 20 percent. "NewCo and Masisa signed a long-term contract for the supply of the raw materials for the board plants of Masisa in Chile," the company stated in IHB.de.


The forestland is located in the Chilean regions of Vadivia and Temuco. Almost half of the timber is radiata pine.


"This agreement will allow us to fund our growth plan for the years 2014 and 2015, strengthen our financial profile and add a partner with a global expertise in investment and management of forest assets, which means an important contribution to the strategy Masisa comprehensive development," Masisa CEO Roberto Salas stated in Latercera.com.

A producer of particleboard and fiberboard for use in furniture and cabinetry, Masisa owns and operates composite panel plants in Latin America, including Mexico.

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CatchMark Agrees to Acquire Timberlands in Georgia and East Texas for $74 Million

CatchMark Agrees to Acquire Timberlands in Georgia and East Texas for $74 Million | Timberland Investment | Scoop.it

CatchMark Timber Trust, Inc. (NYSE: CTT) announced today an agreement to purchase 36,340 acres of timberland (known as the Waycross-Panola properties) located in Southeast Georgia and East Texas from Hancock Timber Resource Group for approximately $74 million. The transaction, CatchMark's first acquisition since its successful initial underwritten public offering last December, is expected to close during the second quarter and is anticipated to be accretive to cash flow for calendar year 2014.


Transaction highlights include:

  • Under terms of the agreement, CatchMark would acquire approximately 1.45 million tons of merchantable timber inventory and increase the share of higher value chip-n-saw and sawtimber in its product mix. The inventory comprises 84% pine plantations by acreage and 54% sawtimber by tons.
  • The Georgia properties, located near Baxley (Waycross), and the East Texas properties (Panola) combined are expected to add approximately 180,000 to 200,000 tons per year to CatchMark's harvest volumes over the next decade.
  • The Waycross-Panola properties are situated exclusively in the core U.S. South timber region in highly competitive wood markets, accessible to some of the best mill markets in the country, which will diversify CatchMark's customer base.
  • The properties feature above-average productivity characteristics--Waycross, in particular, registers inventory growth rates approximately 50% higher than average U.S. South timberlands.
  • The transaction will be financed through CatchMark's credit facility.
Sam Radcliffe's insight:

Arithmetic: $2,036 per acre, $51 per ton. 

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Potential bidders for Gunns get more time

Potential bidders for Gunns get more time | Timberland Investment | Scoop.it

KORDAMENTHA partner Bryan Webster has extended the deadline for expressions of interest in all or part of Gunns Group to the second week of January at the request of potential bidders, who have sent teams to Tasmania to examine the bankrupt timber company that collapsed in September 2012 with debts of $3.02 billion. Mr Webster, a registered liquidator, will know by the middle of the month whether the sale of 139-year-old Gunns can be wrapped up quickly with a compelling bid for the whole company, whose assets were valued by PPB Advisory at $795.9 million last February.


If there is no compelling bid for Gunns, the sale process may move towards an indicative bidding process that will whittle potential buyers down to a handful. That will be followed by final bids, perhaps by the end of March, after full due diligence.


The sale of Gunns has attracted a number of long-term timber investors from Asia, North America and Europe. Potential bidders include Hancock Timber Resources Group and Ontario Teachers Pension Plan following a recovery in timber and forestry prices last year. The S&P Global Timber and Forestry Index rose 17.5 per cent last year.

Gunns bankruptcy is blamed on high debt and the fall in hardwood demand and prices from 2010.
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The sale process of Gunns is complicated by the interests of managed investment schemes in Gunns' timber assets. PPB is the administrator of a number of such schemes. There are 48,984 investors in the managed investment schemes otherwise known as growers whose original investments PPB estimates amounted to $1.6bn. Potential returns to growers is dependent on the continued management of the schemes and harvest on maturity of the plantation timber.


PPB and KordaMentha have agreed that the 50,000ha of timber under Gunns' managed investment schemes will be sold in two parallel processes: one as part of the sale of the Gunns Group or as a self-contained asset in a sale managed by PPB.

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