New Forests expands US timber holdings more than elevenfold with 170,000-acre acquisition

Made on behalf of investors that include two pension funds, the deal is understood to be worth in the hundreds of millions.

New Forests is set to acquire a vast tract of Californian timberland from Roseburg Resources, a forests products business, in a move that will drastically expand its US presence.

The properties, which total 170,000 acres, will be bought through Shasta Cascade Timberlands, a newly created entity backed by institutional investors. These include a North American and a European pension fund, a spokeswoman for New Forests told Agri Investor.

Upon completion, expected in early 2018, the firm will manage a total of 186,000 acres in the US, meaning the deal will increase its American timber holdings more than elevenfold. The deal follows the acquisition of two other California forestry estates in 2016 and 2017.

The firm declined to disclose the transaction’s value, though Agri Investor understands it to be worth hundreds of millions of dollars.

“The launch of Shasta Cascade Timberlands reflects New Forests’ commitment to expanding our US investment program based on a climate-smart forestry strategy, which seeks to deliver competitive timberland returns with additional exposure to revenue from climate mitigation,” said New Forests chief executive David Brand.

The investment will be managed as a Real Estate Investment Trust, the spokeswoman said. She did not disclose a set performance target, but noted that “returns in this case are anticipated to be supported by traditional timberland returns with upside exposure from carbon markets, so seeking to outperform the relative California timberland benchmark.”

The estates include stands of Douglas-fir, ponderosa pine and other mixed conifers stretching across four major blocks from Redding north to Mount Shasta, in the north of California.

Based in Sydney, Australia, New Forests manages more than 2 million acres of forestry, land and conservation assets.