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New Zealand Forestry Market Update | August 2021

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Forestry continues the upward trend

Land for forestry purposes continues to be in high demand and we are seeing a good level of sales activity, supported by strong commodity prices and upward pressure to carbon prices.

2021_08 Forestry trends 

Forestry land

Carbon farmers are purchasing greenfield land throughout the country with most transactions occuring in the more remote localities.

Forestry companies are also in the market for greenfield land for dual carbon farming and timber production. These interests are generally purchasing closer to processing facilities or export sites and they are paying prices in excess of $16,000 per hectare for ground-based harvesting land in good localities.

There is less activity in the smaller and medium-sized block pre-1990 forestland segment. The activity in the pre-1990 forestland has been for larger portfolios that have been purchased inclusive of timber crop.

Log prices

The at-wharf log prices have been solid with June prices being the highest since the mid-1990s. The July pricing was back slightly off that peak.

Supply chain issues are causing additional costs with a stubbornly high cost of shipping and wharf loading issues at some sites also adding demurrage costs.

Carbon market

The secondary carbon market has now exceeded $49 per NZU post the second government auction of carbon where the 4,750,000 NZU’s of carbon all sold at a price of $41.70. The next auction is set down for 1 September where a further 4,750,000 NZU’s will be offered.

Te Uri Rāku – New Zealand Forestry Service has signalled that processing time for registering land in the emissions trading scheme is in excess of six months. Those purchases wishing to register their land in the carbon accounting scheme or the averaging scheme and claim carbon back to 2018 will need to move quickly to complete registration.

We are of the opinion that the market will continue to strengthen with comparable carbon markets in Europe at a level commensurate of $NZ90 per NZU and continued solid log pricing.

There are also cash rich investment platforms and individuals looking for primary industry assets to invest in.

 

 

For more information, please email one of our registered valuers specialising in forestry land - Blue Hancock, Chris Boyd or Tim Gifford.

Click here to view our previous forestry map for 2020.

Follow the links to access more sales maps and market commentaries on dairy, sheep & beef, viticulture, arable and kiwifruit markets.


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New Zealand Forestry Market Update | August 2021

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Related Experts

Blue Hancock

Director | Rural Valuation

Richmond (Rural Valuation)

Blue has over 38 years valuation experience encompassing rural and resource interests, specialised agriculture  assets, public sector property (especially forest interests), expert evidence and management. His prior work in senior roles with both Valuation New Zealand and Quotable Value has given him broad property knowledge – with a particular emphasis in the forestry sector.

His client work for Crighton Anderson has traversed a range of property types and issues including; forestry land valuations (lessor and lessee interests), Emission Trading Scheme issues, specialised assets, agribusiness, lifestyle subdivisions, valuations for financing, tax compliance, trust formation, matrimonial disputes, Maori land issues, aesthetic land and compensation. In addition he has provided expert evidence and acted as an arbitrator in a number of judicial contexts.

Blue’s work previously encompassed managing the rating revaluation and roll maintenance programmes for six local authorities in the South Island, giving an in-depth understanding of rating issues and the valuation of exotic forests and national parks, and acting as Principal Consultant (Rural and Forestry) for Quotable Value. Blue’s more recent large-scale engagements have included the valuation of forest assets in Otago, Nelson, Marlborough, Gisborne, Hawke's Bay, Wairarapa and Northland for financial and Treaty of Waitangi settlement purposes, as well as Crown Forestry License rent reviews. .

Blue’s personal involvement in agribusiness extends to ownership of a West Coast pine plantation and membership of the Farm Forestry Association. As past President of the Property Institute of New Zealand and former President of the New Zealand Institute of Valuers, Blue is highly regarded by both his clients and peers in the profession. He is based in our Nelson office and plays a key role in our agricultural and forestry sector practices and in our dairy pastoral and horticulture valuation teams..

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Chris Boyd

Executive Director | Rural Valuation

Tauranga

Chris has 36 years valuation and consultancy experience across a wide variety of property related matters including compensation, financial reporting statutory compliance, acquisition and rural valuation. He previously held senior positions at both Valuation New Zealand and Quotable Value – where his primary focus was the Bay of Plenty and Waikato regions.

His client work for the firm since 2008 has covered a range of property types and issues including; agribusiness, horticultural ,  lifestyle and residential development land, forestry land valuations, Emission Trading Scheme issues, specialised asset valuations, valuations for financing, due dilligence tax compliance, trust formation, matrimonial disputes and compensation. In addition he has provided expert evidence in the High Court, District Court, Maori Land Court, Environment Court  and Land Valuation Tribunal.

Chris’s infrastructure sector experience has included valuation and advisory projects covering compensation for easement and right of way property interests acquired by Transpower and other leading New Zealand energy companies, for new transmission lines and infrastructure upgrades, and compensation assessments for Crown entities taking property under the Public Works Act 1981 for motorways and pipelines.

His forestry sector experience has encompassed numerous valuation and advisory engagements throughout the country – including advice in relation to devolution of the New Zealand Forestry Service in the late 1980s, land value and rental review assessments as part of Crown Forestry license protocols and Maori Land rental review requirements, various Treaty of Waitangi settlement awards and providing expert evidence.

Chris is based in our Tauranga office and offers our clients sound market advice founded on a comprehensive understanding of the specific sector dynamics and balanced by experience gained working on behalf of owners, regulators and adjudicators in both the public and private domain. He is involved in a number of practice areas including forestry, dairy, Kiwifruit Avocados, infrastructure and pastoral.

Chris is the immediate past chairman of the Tauranga branch of the Property Institute of New Zealand and is a member of  the Waikato No. 4 Land Valuation Tribunal and the Directors Institute of New Zealand.

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Tim Gifford

Director | Rural Valuation

Blenheim

Tim has 13 years property valuation experience and is based in our Blenheim office. Prior to joining CAPI in 2006 he worked as a valuer for Quotable Value based in Christchurch..

Since 2006, Tim’s client work has included viticulture, high country tenure review and rental valuations, pastoral valuations, lifestyle, specialised asset valuations and compensation for various infrastructure projects nationwide.

Tim’s viticulture experience includes the valuation of vineyards for financing, sale & purchase and rent setting purposes for a number of clients including Pernod Ricard, Indevin, Wither Hills, Cloudy Bay, Allan Scott Wines, Treasury Wine Estates, plus a number of others. Tim is also frequently engaged to provide valuation advice to most of the major banks. Having grown up and lived most of his life in Marlborough, Tim has in depth local knowledge of the region.

Tim has extensive experience in valuing large pastoral and high country properties throughout the South Island, either on behalf of Linz for tenure review or rent review purposes or for corporate and private landowners. Properties valued include Muller Station, Mt White, Mt Albert, Mt Creighton, Godley Peaks, Hossack, Glen Wye, Glenhope, Forest Range plus many more. Tim is designated as an assessor under Section 23P Crown Pastoral Land Act 1998 to provide rental assessments on Crown Pastoral Lease properties.

Compensation is another key area of expertise and Tim has provided property advice on a number of projects nationwide including Transpowers 400kV transmission line build through the Waikato, Central Plains irrigation scheme through Canterbury, land acquisitions for roading on behalf of the New Zealand Transport Agency as well as new transmission line easement assessments for various network operators throughout New Zealand.

Tim offers our clients excellent technical skills and market knowledge, together with a sound appreciation of both private and public sector imperatives. He plays a key role in our viticulture, pastoral and compensation valuation teams.

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Hunter van der Fits

Valuer | Rural & Agribusiness

Richmond (Rural Valuation)

Growing up on a coastal dairy farm in Manaia, South Taranaki has provided me with a robust rural backing and passion for the agriculture sector. University holidays spent working on a range of farm types and systems has also broadened my knowledge and understanding of what drives value.

I spent four years at Lincoln University and completed a Diploma in Agriculture, Diploma in Farm Management and Bachelor of Commerce (Agriculture) before working on a dairy farm for six months fulfilling practical work requirements. I was then talked into further study, completing a Graduate Diploma in Valuation in 2020 and received the Colliers Rural and Agribusiness Valuation Scholarship.

My 2019/20 summer was spent at the Christchurch office working alongside the senior valuers gaining valuable experience of rural property valuations before finishing up my studies and joining the company full time in September 2020. I have teamed up with Blue Hancock at the Colliers Richmond office to provide market valuations for a range of farm types. I am working towards becoming a fully registered valuer with Colliers International.

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