Invercargill City Council-owned forests hit the market

Invercargill City Council-owned forests have hit the market after it was decided to sell them off last year.

The 14 forests in Southland, Otago and Nelson/Marlborough have a combined area of 3599ha and a total productive area of 3,058ha, predominantly stocked with radiata pine.

The estate is being sold by Invercargill City Forests Limited – a subsidiary of Invercargill City Council’s holding company, Invercargill City Holdings Limited.

The decision to divest was made after a review of the holding company’s investments in relation to the strategic objectives agreed with council.

In April, Holdco resolved that Invercargill City Forests Limited was not a good investment fit and would be sold.

At the time, Holdco chairman Brian Wood said ‘‘this decision was not taken lightly but took into account the company’s debt position, the forecasted reduction in harvesting revenue and the risks associated with owning forestry.’’

For the 2019 year, Invercargill City Forests Limited recorded a loss of $2.6m compared to a profit of $733,000 the year before.

Colliers International’s specialist forestry sales team has been appointed to market the estate for sale by way of a two-stage expressions of interest campaign.

Forestry director Warwick Searle said the age profile of the estate was bimodal, with substantial areas planted between 1994 and 2000, plus a significant portion of the estate established from 2012 to 2019.

The estate can be purchased in entirety or separately by region.

Forestry Broker Angus Robertson said the Southland portion of the estate comprises nine forests with a total combined gross area of 2442ha and a productive area of 2009ha.

The three Otago forests have a combined gross area of 946ha and a net stocked area of 890ha and the two forests in Nelson/Marlborough have a combined gross area of 211ha and a net stocked area of 159ha.

The estate has 1300.32ha of post-1989 registered forest under the Emissions Trading Scheme. The vendor will repay the liability for all previously sold carbon credits to ensure the successful purchaser incurs no financial liability if the estate is replanted in perpetuity.

Expressions of interest close at 4pm on Thursday, March 19, after which shortlisted parties will be invited to participate in the second stage.