Forest Overview

In 1999, they planted Pinus Radiata in Mangahoe forest, thinned the crop, and it is showing excellent growth nearing maturity. This property is not registered in the Emissions Trading Scheme – you should seek professional advice for eligibility.

Positioned behind the settlement of Kaitieke is Mangahoe Forest. The approximately 20ha forest sits on a single freehold title being 23.3372ha. Access the property within a 30-minute drive, providing unparalleled convenience and connectivity.

Flourshing Island for its forestry sector. This sector offers a wealth of options for servicing forest owners, including forest management, silviculture, harvesting, and related services.

Mangahoe Forest is not just land; it’s a remarkable investment opportunity. Its strategic location, existing infrastructure, and growth potential make it an attractive choice for investors looking to capitalize on New Zealand’s thriving forestry sector. Don’t miss the chance to secure this unique and promising asset on the doorstep of major markets. Invest in Mangahoe Forest and watch your asset flourish.

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Contact the sole agents Warwick Searle and George Cashmore for more detailed information on the property.

Tenders Close: 4pm Thursday 30th November 2023 (unless sold prior)

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Forest Overview

Strategically located in the foothills of Wellington. Accessible via multiple road access via CentrePort in Wellington and 26 kilometers South via SH2.

It comprises a second rotation forest predating 1990, currently stocked at 174 hectares, with an additional 40.7 hectares awaiting replanting. What sets Silverstream Forest apart is its existing infrastructure, a legacy of the previous harvest. With approximately 10 kilometers of well-maintained log roads traversing the property and over 20 skid sites already in place, minimal capital investment in infrastructure is required between now and harvest.

Furthermore, the future development of this property serves to both local and international markets. It boasts picturesque views over the Hutt River, Silverstream, Upper Hutt, Lower Hutt, and Central Wellington. All these locations are accessible within a 30-minute drive, offering unparalleled convenience and connectivity. The lower North Island is renowned for its flourishing forestry sector. This sector provides a wealth of options for servicing forest owners, including forest management, silviculture, harvesting, and related services.

Silverstream Forest is not just land; it’s a remarkable investment opportunity. Its strategic location, existing infrastructure, and growth potential make it an attractive choice for investors looking to capitalize on New Zealand’s thriving forestry sector. Don’t miss the chance to secure this unique and promising asset on the doorstep of major markets. For comprehensive information about this exceptional opportunity, contact Colliers’ exclusive agents, Warwick Searle and George Cashmore. Invest in Silverstream Forest and watch your asset flourish.

Colliers has been exclusively appointed to manage a single stage tender sale process. Please contact the sole agents Warwick Searle and George Cashmore for more detailed information on the property.

Close Proximity to Export and Domestic Market

NSA 174ha, Plantable Area 214.7ha

Second Rotation Pre-1990 Forest

Don’t miss out contact our forestry specialists to request the detailed Information Memorandum!

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New Zealand is currently reevaluating the role of its forestry sector in achieving its long-term climate change goals and its implications for the New Zealand Emissions Trading Scheme (NZ ETS). Recent research conducted by Motu Economic and Public Policy Research and the Environmental Defense Fund sheds light on New Zealand’s innovative approach to forestry within the NZ ETS, its outcomes, and the questions it raises for the future. To guide future policy decisions not only in New Zealand but also in other nations, researchers have analyzed the behavior patterns within New Zealand’s forestry sector under emissions pricing. While the NZ ETS has stimulated afforestation and reduced deforestation, the results have not always aligned with policymakers’ intentions. Further policy adjustments will be necessary to help New Zealand meet its climate objectives well into 2050 and beyond.

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There is an increase in demand for carbon credits through the New Zealand Emissions Trading Scheme (ETS)

Through the ETS, carbon is sequestered from planted forests and companies can buy carbon credits to offset their emissions. ETS helps New Zealand meet its obligations under the Paris Agreement to mitigate the effects of climate change.

Planting more trees boosts emissions offsetting. Increased demand has driven up the price of ETS carbon credits. In 2022, prices surpassed the government’s cap, prompting the release of the entire year’s reserve to stabilize prices. Find more details on our blog. Current legislation together with unforeseen demand, poses risks to primary sectors and local communities, as well as to ecology and the environment. Hence, the government proposes amendments to mitigate these risks.

What does forestry look like under the current legislation?

Currently there are two options for ETS forestry planting.

Forestry under current legislation offers two options for ETS. Forests serve dual purposes: carbon sequestration and timber production. Forest owners earn credits for 16 years of growth, but subsequent rotations incur no further credits and permanent forests offer ongoing credits, typically around 80 years for pine.

Why is the New Zealand Government proposing new legislation?

The government has determined a major risk that comes from planting permanent exotic forests under option two. The demand for carbon credits increasing above forecasted rates, the price could cause an upsurge in pine forest planting. This will take over premium food producing farmland and native forest and eroding rural land values across New Zealand.

This is not the Government’s intended outcome of the ETS and sees agriculture, food production, and our environment lose out in the long term.

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One NZU equates to one metric tonne of carbon dioxide or other equivalent greenhouse gasses and companies buy carbon credits to offset their carbon emissions as part of the New Zealand Government’s Emissions Trading Scheme (ETS). The ETS is created through the Climate Change Response Act 2002.

The Act was passed to recognize New Zealand’s obligations within the Kyoto Protocol – which sets binding emissions reduction targets for 37 industrialised countries, economies in transition, the European Union – and obligations under the Paris Agreement.

The ETS was set up in 2008, making it one of the first schemes set up to counter the effect of climate change and is New Zealand’s key tool to combat carbon emissions. Auctions for NZU’s are run quarterly and companies that carry out activity stipulated in the NZ ETS are required to buy one NZU for every one tonne of carbon dioxide or equivalent emissions they produce. NZUs can also be traded through secondary markets, and participants can buy and sell units from each other.

Why has the price of carbon credits increased so quickly?

The emissions trading market is growing fast globally and the dramatic rise in carbon credits reflects market demand and speculation.

As part of the ETS the New Zealand Government has a ‘cost containment’ reserve of 7 million NZUs per year, which at a ‘trigger price’ (which was in the past financial year $50 NZU) gets released in order slow down a sudden carbon credit price increase. The goal of a cap is to ensure that prices don’t escalate too quickly, leading to dramatic price rises being passed onto consumers. However it could be argued that the NZU was too low to begin with making it too easy for industry to simply offset their carbon emissions through NZU investment rather than investment into more environmentally friendly processes.

Earlier this year the cap was $25 per NZU and was raised to $50 NZU in August 2021. The Government had budgeted 7 million NZUs per year to release into the auction market. However, due to increased demand and trader speculation, the entire 7 million cost containment fund had to be released into the market to maintain the $50 market cap. With the cost containment fund exhausted, the price increased within two months to $65 NZU.

The new $65 price has moved into a new financial year and the government have another $7 million NZU in the cost containment coffers and have raised the cap to $70 per NZU. However, speculators see the price of carbon credits surpassing this number in a matter of months.

Up until last year, the price of carbon credit, also known as NZUs, was at $25 per unit, but from August this year went to $65 per (NZU)

How has the increased carbon credit price impacted forestry sales?

The Kyoto Protocol was established in 1990, and any forest areas formed before 1989 are considered part of New Zealand’s baseline emissions. They cannot be included as additional carbon storage in the ETS. Forests established post-1989 can be regarded as new ‘carbon sinks’ and registered by companies in the ETS to earn units for that carbon storage.

The new NZU price is changing the way we see investment in New Zealand forestry. A recent sale of a block of near mature wood was sold in the Whanganui region, and we expected it to be harvested due to its healthy, well-pruned trees with good access. However, with the investor established the block as a carbon sink to generate NZUs which were more valuable than the profit from wood.

What does the new carbon credit price mean for me as a seller?

The value of carbon credits is an opportunity for sellers to have a significant spike in investment interest for both forestry blocks and greenfields – bare land that can become a forestry and generate NZUs for several years.

The increased price directly correlates with increased land value. For farmers looking to exit the industry and retire, they now have more opportunities to leave the farm with the increased land value and stronger investor interest.

What does it mean for investors?

The increase in NZU price now makes forestry sales a competitive option for land-based investment. Previously forestry hasn’t been able to compete with farmland in terms of returns.

There is an increasing amount of farm land where the most profitable use of that land is forestry.

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