Forest Enterprises is pleased to introduce the Wairarapa Group Forest Investment, a 970-hectare second rotation pine forest located in the picturesque Wairarapa region, ninety minutes from Wellington city.
This is New Zealand’s first forestry Managed Investment Scheme to be promoted under the new financial markets regime.
Offer open for applications
The issuer of the shares in Wairarapa Group Forest Investment is the licensed manager, Forest Enterprises Limited, and the offeror of the shares is Forest Enterprises Growth Limited (a related party of the manager). The Supplementary Document (dated 1 August 2019) and Product Disclosure Statement (dated 11 October 2018) are registered and available to view at www.companiesoffice.govt.nz/disclose.
For a Product Disclosure Statement, use the online form below or contact Marketing Manager Nikki Coulmann by email [email protected] or phone +64 27 55 44 325. Your indication of interest does not involve an obligation or a commitment to acquire shares.
Wairarapa Group Forest Investment Overview
The minimum initial investment cost is $10,189 for 200 shares, plus projected annual contributions per 200 shares of $10,458* spread over 20 years (next call 30 June 2020). The total projected contribution per 200 shares is therefore $20,647*.
Additional shares may be purchased at $50.945 per share.
Projected harvest years (income) is 2039-2045
Return on Investment $115,531* and gross IRR 8.53%*
Wairarapa Group Forest Investment is 970-hectares of radiata pine forest, comprising 3 second-rotation forest properties in the Wairarapa. Forest Enterprises managed these blocks through to the successful harvest of their first rotation crop. The investment benefits from second rotation forest characteristics, namely that the land is conditioned for pine, it has been replanted with genetically superior tree stock, and harvest infrastructure (roads and processing areas) is already in place.
* Per 200 shares, based on 2% per annum inflation and Forest Enterprises’ 36-month log price series to 30 June 2018. Refer Product Disclosure Statement.
Why our clients invest in forestry
Whether investing with us for the first time, or an existing Forest Enterprises client, our investors choose to invest in high-quality forestry because:
- To supplement retirement income like Kiwisaver
- For their children and grandchildren
- To diversify their investment portfolio with a land-based investment
- To change the weighting of their portfolio towards sustainability
- To directly invest in a renewable resource that reduces atmospheric carbon
“We will definitely be reinvesting in the second rotation and so will our daughter.Of the many investments we have made over the years, none have provided the exemplary communications and well-thought-out plans for the future that Forest Enterprises has.
This has provided us with total trust that you and your team have worked throughout in the best interests of investors – an all-too-rare approach in modern commerce.
Thank you again for the integrity and professionalism you have all shown in managing our forestry investments.”
About our new investments
Wairarapa Group Forest is the first of two new issue forestry investments we will be releasing in 2018/2019.
These are second rotation radiata pine forests bearing the hallmarks of Forest Enterprises’ professional investments:
- Managed Investment Scheme (MIS) registered under the Financial Markets Conduct Act 2013
- Full-service investment and forest management by licensed MIS manager, Forest Enterprises
- Limited Partnership investment structure for limited liability and optimal tax deductibility
- Initial investment and annual contributions set at an affordable level for retail investors
- Harvest profile provides cashflow over multiple years
- Investments include land and trees
- Forest size provides economies of scale
- Benefits from second rotation forest characteristics
Benefits of investing in second rotation forestry
The existence of the roading and other infrastructure will materially reduce the related costs for the second rotation harvest. Also, the improved forest access provided by the roading network will considerably assist the management of the forest through to harvest.
- a Radiata pine plantation forest can be successfully established and grown on the land
- it is possible to successfully harvest the forest properties and extract the logs produced to a public road
- the regional distribution infrastructure exists to successfully transport the logs by truck, rail and ship to their ultimate customers
The best practice management of a Radiata pine plantation forest continues to evolve over time. The second rotation forest will be managed in a manner consistent with current best practice and this will contribute further volume and quality gains to the second rotation.
Risk Mitigation
Adverse Event
The larger the forest, the greater the area available to absorb the consequences of adverse events such as wind or fire. The loss of 10 hectares in a 10-hectare forest represents total devastation; in a 250 hectare forest a material loss; but in a 600+ hectare forest the impact is relatively immaterial.
Market Exposure
The larger the forest (and the wider the spread of age classes), the longer the time in the market. The longer the time in the market, the greater the likelihood that the average log prices achieved will represent the long run average prices. Equally important is the increasing irrelevance of the day-to-day log prices, especially the inevitable periods of low prices, as these are likely to be balanced by periods of high prices. An additional benefit from a group forest structure is that complimentary age classes will extend the harvest profile and consequently enhance the mitigation of market exposure risk.
Cost Savings
Harvest Cost Savings
Harvest cost benefits arise when long-term arrangements can be put in place with the harvesting service providers (loggers, truckers etc). The long-term continuity of work for these service providers can remove from their prices the risk of down time from work, or having to invest time securing future work. Also, harvest costs such as the cost of resource consents and the cost of shifting equipment to the forest, are less of a financial burden the larger the forest.
Fixed Investment Cost Savings
The fixed investment related costs such as the financial and forest audits, Supervisor’s fees, and financial markets compliance fees, are less of a financial burden the larger the investment. Even fees such as rates are proportionately less due to there being just one set of fixed charges.
Forestry is profitable, tangible & sustainable
Forestry is a sustainable, real asset that generates real financial, economic and environmental returns from one generation to the next.
How our investments work
Not all forestry investments are the same. A Forest Enterprises investment is structured to provide investors with control and protection, and managed to maximise efficiencies and returns.
About us
Forest Enterprises helps investors grow their wealth through investing in some of the most exceptional pine forests in New Zealand, and by expertly managing them from establishment to harvest.
