Resource Management Service, LLC (RMS) has announced that it has successfully completed the sale of its Tasmanian hardwood plantations to investment funds advised by Global Forest Partners LP (GFP) of Lebanon, New Hampshire.
The transaction included total productive area of 21,000 hectares on 36,500 hectares of freehold land. The assets consist of two operating units spread across the northwest, northeast and southern regions of Tasmania, and were acquired by RMS from receivers in 2014 and 2015 with a strategy of generating near-term cash yields and long-term asset appreciation for the firm’s institutional investment clients.
Funds “Our decision to monetize these assets on behalf of our clients was driven by our assessment that market conditions were attractive for a sale. We expected the market would fully value the significant work RMS has undertaken to restructure and improve the portfolio of assets”, said Craig Blair, President and CEO of RMS.
The plantations are largely stocked with Eucalyptus nitens and are located in close proximity to processing plants and ports. The output from the plantations can be sold as hardwood logs for solid wood processing and as hardwood chips. The timber grown on the properties is sold into Asian export markets, which has a strong appetite for hardwood timber products. According to Blair, selling the two Australian estates together enhanced the overall value of the offering by providing a competitive level of scale in the Tasmanian hardwood industry.
“We are pleased to have taken these plantations through a value-enhancing investment cycle for our investors,” said Blair. “Australia is an attractive destination for sophisticated institutional investors, like our clients, because it offers excellent global diversification for their forest portfolios.
The country has a robust and growing forest industry and its primary timber cultivation regions, including Tasmania, provide outstanding access to high-growth global markets. For all of these reasons, we expect to be active participants in the region’s forest investment and ownership community in the years ahead.”