Asset manager New Zealand Rural Land Company has named Perella Weinberg Partners in New York to lead the search for a strategic US investor, after completing a forestry acquisition and establishing a dual-listed structure.
The REIT, which is listed on New Zealand’s Exchange, reached financial settlement on the purchase of a 2,400ha forestry estate in the Manawatū-Whanganui region on NZ’s North Island in April for approximately NZ$63 million ($42 million; €39 million). A week later, it reached settlement on a further forestry property in the region covering approximately 737ha for a sum of around NZ$8 million.
“This has diversified us into the forestry and carbon spaces,” NZRLC CEO Richard Milsom told Agri Investor. “We like the carbon space in particular, as well as the opportunity to develop some renewables around the edge of some of our pastoral properties.”
NZRLC successfully implemented a dual listing in Frankfurt at the beginning of March, following requests from several potential European investors, as the firm seeks to broaden its investor base.
As part of these efforts, Milsom said, Perella Weinberg Partners had been appointed on a “bespoke mandate” to reach out to North American investors.
“They are looking for the right person or organization – it will appeal to someone who wants a local partner and wants exposure to some of the highest-quality agricultural assets in the world without owning and operating those assets themselves,” he said.
The partner would take a 25 percent stake in NZRLC’s existing portfolio and have first exemption rights to follow on in subsequent investments.
Milsom said it would also provide an opportunity for a foreign investor to gain access to NZ-based forestry and farmland, with the country usually “quite insular” on that front.
“[The ability to get exposure] to carbon in New Zealand is quite unique – although foreigners can buy some timber and forestry assets, they cannot use those assets for carbon offsetting. You have to elect whether you’re going to use them for production or carbon, so foreigners can’t get exposure [to the sector] otherwise,” Milsom added.
In its most recent annual report for the financial year ended December 31, 2022, NZRLC reported a net profit after tax of NZ$5.3 million – covering a period of only six months due to a change in the company’s financial reporting date to the end of the year.
The firm’s portfolio increased in value by 0.94 percent over the six months to December 31, which it said “reflect[ed] the resilience and quality of NZL’s portfolio in an uncertain macroeconomic environment which is putting downward pressure on the value of many other assets.”
Since listing on the NZX in December 2020, NZRLC’s audited net asset value per share has increased at a compound annual growth rate of around 15 percent per year.