New Zealand Superannuation Fund-backed Kaingaroa Timberlands expands with South Waikato land purchase

Kaingaroa Timberlands has bought forestry land in South Waikato. Photo / PedrottiPhotography, weseeg

Kaingaroa Timberlands, part-owned by the New Zealand Superannuation Fund, has bought 9200ha of high-quality forestry land in South Waikato for an undisclosed sum.

The acquisition reinforced Kaingaroa Timberlands’ (KT) confidence in the future of New Zealand’s forestry industry, the company said.

The deal was recently approved by the Overseas Investment Commission.

The newly acquired business, Te Waihou Plantations, was formerly owned by Te Waihou Holdings Ltd (a Global Forest Partners LP-advised company) and is already dedicated to commercial plantation forestry.

The transaction ensures that the land will remain dedicated to its existing use, and will preserve its established role in commercial forestry, KT said.

KT, which manages about 215,000ha of forest in the Central North Island, is 55% owned by Canada’s Public Sector Pension Investment Board and 45% by the Guardians of New Zealand Superannuation and Kakano Investments LP.

“We are excited to expand our footprint in the South Waikato area, a region with a strong forestry heritage,” said Dean Witehira, chief operations officer and acting chief executive of KT’s wholly-owned subsidiary Timberlands.

“This acquisition underscores our long-term commitment to New Zealand and our confidence in the forestry industry,” Witehira said.

“By expanding our estate, we are not only securing the future of forestry in the Central North Island, but we are also positioning ourselves to make further investments in our operations, driving further economic growth and job creation.”

PGG Wrightson Real Estate, in a report earlier this year, said demand for forestry property had been subdued since the 2023 election and change of Government.

“Both the termination of the previous Government’s billion trees planting programme and the pre-election change in Overseas Investment Office (OIO) policy constrained conversions from farmland to forestry under foreign ownership,” PGG Wrightson said.

The post-election market for forests and forestry land had been slow.

Some private sales have taken place, mainly to New Zealand nationals and private buyers, with land values ranging from $7000 to $9000 per hectare, PGG Wrightson said.

Forests cover 31% of New Zealand’s land mass, with plantation forestry taking up 7% of the total land area.

Forestry exports are the third-largest export earner for New Zealand, behind dairy and meat.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.