GIPPSLAND PLANTATION AGGREGATION INFORMATION MEMORANDUM SEPTEMBER 2015 FOR PRIVATE SALE CENTRAL GIPPSLAND, VICTORIA, AUSTRALIA
GIPPSLAND PLANTATION AGGREGATION  INFORMATION MEMORANDUM SEPTEMBER 2015 FOR PRIVATE SALE CENTRAL GIPPSLAND, VICTORIA, AUST...
For further information please contact: David Smith Smith Agri International +61 418 332 780 david.smith@smithagriinternational.com.au
For further information please contact  David Smith Smith Agri International  61 418 332 780 david.smith smithagriinternat...
CONTENTS 01 INTRODUCTION 3 02 EXECUTIVE SUMMARY 7 03 THE OPPORTUNITY 8 04 STRATEGIC LOCATION 9 05 GIPPSLAND PLANTATION AGGREGATION OVERVIEW 13 06 FORESTRY OPERATIONS 15 07 CLIMATE AND RAINFALL 17 08 CONCLUSION 18 09 DISCLAIMER 19 Note – all property areas, figures, and calculations throughout this Information Memorandum are approximate in nature and are based upon figures obtained from external sources which have been relied upon without verification by the Vendor or by SAI or any of their respective officers, employees or consultants. A Recipient of this Information Memorandum should undertake their own due diligence investigations to obtain exact figures in relation to the Gippsland Plantation Aggregation.
CONTENTS 01  INTRODUCTION  3  02  EXECUTIVE SUMMARY  7  03  THE OPPORTUNITY  8  04  STRATEGIC LOCATION  9  05  GIPPSLAND P...
THESE PLANTATIONS HAVE PROVIDED A READY SUPPLY OF SMALLER SAWLOGS IDEAL FOR THE POSTS AND POLES MARKET
THESE PLANTATIONS HAVE PROVIDED A READY SUPPLY OF SMALLER SAWLOGS IDEAL FOR THE POSTS AND POLES MARKET
01 km 600 INTRODUCTION Smith Agri International (SAI), as exclusive agent, is pleased to present for sale four quality plantation forestry properties located between the Gippsland towns of Stradbroke and Longford, Victoria (the Gippsland Plantation Aggregation) by PRIVATE SALE. 400 km Jelfor Treated Timbers, a family grown third generation timber treatment business invested heavily (since 1990) in the establishment and management of its own purpose grown plantation estate. Located close to its Traralgon milling and treatment operations, these plantations have provided a ready supply of smaller sawlogs ideal for the posts and poles market. This strategy of self-sufficiency has served Jelfor Treated Timbers well however, with tree size, volume and sawlog values increasing, these maturing plantations are now growing beyond Jelfor Treated Timber’s ideal market specification. Whilst it is recognised that significant areas of the Prices Road property remain immature and hence present a future supply for posts and poles, the overall plantation assets now represents a much greater value proposition. Portland Colac 300 km 200 km 100 km Bairnsdale Melbourne Traralgon Jelfor Plantations Jelfor Treated Timbers LEGEND These strategically developed, well managed plantations are ideally located within one of Australia’s most desirable plantation growing regions, the Central Gippsland Plantation Region (pictured). The Gippsland Plantation Aggregation comprises a total land area of approximately 789 hectares, of which 654 hectares has been planted to Pinus radiata. The Wulla Wullock property also includes a quality 3 bedroom, 2-story brick house upon approximately 6.8 hectares of clear land located within 4 to 8 kilometres of coastal towns, The Honeysuckles and Seaspray. Page 3 Central Gippsland Plantation Region
01  km 600  INTRODUCTION Smith Agri International  SAI , as exclusive agent, is pleased to present for sale four quality p...
LAND SURROUNDING THE PLANTATION SITES DISPLAY A RANGE OF ALTERNATIVE USES INCLUDING GRAZING, IRRIGATION, MARKET GARDENS, AND LIFESTYLE ALL WITHIN 5 KM’S OF THE COAST
LAND SURROUNDING THE PLANTATION SITES DISPLAY A RANGE OF ALTERNATIVE USES INCLUDING GRAZING, IRRIGATION, MARKET GARDENS, A...
01 INTRODUCTION cont. KEY SELLING FEATURES • High quality individual forestry properties set across approximately 789 hectares with 654 hectares of well-managed, mature commercial Pinus radiata plantations of varying age classes. • Commercial thinnings have occurred on-time throughout each plantation’s rotation, yielding a complete range of softwood products. • All sites have been well laid out for harvest, front developed roads and maintain excellent year round access and good firebreak protection. • The properties are unencumbered. Trees and land are free of any external interests. • Sites are ideally located to benefit from continued plantation management, or following harvest can easily be converted to a range of alternative uses, as outlined below: - Forestry: Sites are located in close proximity to numerous processing towns as shown in the regional map (refer page 10). - Alternative use: Lifestyle - Sites are located close to well-populated towns (Longford, Sale, Rosedale, Stratford and Maffra) providing all services in support of a range of lifestyle uses. The Wulla Wullock property has a well-built 3 bedroom, 2-story brick house featuring ample living space, all within only 4 radial kilometres of the coastal town of The Honeysuckles, Victoria. Timber lined throughout, this well-appointed residence provides the ideal secluded permanent residence or weekend getaway. Agricultural - All sites adjoin existing farming properties and are considered suitable for conversion to a range of agricultural pursuits such as grazing, cropping and/or irrigation. Page 5
01  INTRODUCTION cont. KEY SELLING FEATURES         High quality individual forestry properties set across approximately 7...
THE GIPPSLAND PLANTATION AGGREGATION IS IDEALLY POSITIONED TO COMPLEMENT THE EXISTING PLANTATION FOREST INDUSTRY
THE GIPPSLAND PLANTATION AGGREGATION IS IDEALLY POSITIONED TO COMPLEMENT THE EXISTING PLANTATION FOREST INDUSTRY
02 EXECUTIVE SUMMARY BACKGROUND The purpose of this Information Memorandum is to provide an overview to prospective purchasers of the Gippsland Plantation Aggregation. This Information Memorandum is not a full and complete account of all relevant matters in relation to the properties and prospective purchasers should make their own enquiries to satisfy themselves as to all relevant matters. PROPERTY OVERVIEW The Gippsland Plantation Aggregation is well-positioned to complement the existing plantation forestry industry. Comprising approximately 789 hectares, these highly productive properties will suit those within the forestry industry wishing to expand their regional plantation footprint and/or complement their existing market woodflows. Superbly managed, the mature Pinus radiata plantations are fast approaching their second thinning or final harvest which underpins quick reliable returns. Established within one of Australia’s most desirable agricultural growing regions (Central Gippsland Region) these sites are ideally located in close proximity to well established timber processing towns (Traralgon, Morwell, Yarram, Maryvale, Alberton), and ports at Eden, Geelong and Melbourne. SCOPE OF CURRENT ENTERPRISE The Gippsland Plantation Aggregation continues to be well managed. Excellent site selection parameters including suitable soil types and good reliable average rainfall ensure these plantations present extremely well. The sites are flat to slightly undulating and are underpinned by an excellent network of private and public roads with easy, year-round access to numerous processing plants (mills) and ports. Thinning operations are on-going providing forward cashflow. Page 7
02  EXECUTIVE SUMMARY BACKGROUND  The purpose of this Information Memorandum is to provide an overview to prospective purc...
03 THE OPPORTUNITY THE GIPPSLAND PLANTATION AGGREGATION COMPRISES: • Wulla Wullock plantation: • Flints plantation: Pinus radiata - 222 hectares planted in 1990/91/92 (23 years rising). This property also features a well-built 3 bedroom, 2-story brick house, see below. • The Bush Block plantation: Pinus radiata - 150 hectares planted in 1995/96 (20 years rising) • The Prices Road plantation: Pinus radiata - 200 hectares planted between 1998 and 2008 (7 to 17 years rising) Page 8 Pinus radiata - 82 hectares planted in 1993/94 (21 year rising) The Wulla Wullock House.
03  THE OPPORTUNITY THE GIPPSLAND PLANTATION AGGREGATION COMPRISES       Wulla Wullock plantation                       Fl...
04 STRATEGIC LOCATION THE GIPPSLAND PLANTATION AGGREGATION KEY DETAILS ARE OUTLINED BELOW: Block Total Area (approx hectares) Area Planted (approx hectares) Stocked Area (approx hectares) Date Planted Wulla Wullock 267 222 214 1990/91/92 Flints Block 86 82 76 1993/94 The Bush Block 214 150 138 1995/96 Prices Road 222 200 196 Northern (1998/99) Southern (2000/08) * Total area (ha) 789 654 624 * Southern section originally planted in 2000/2001, early drought losses resulted in annual replanting until 2008. Located within the highly productive Central Gippsland Plantation Region, the plantations are ideally disbursed to utilise both public and private infrastructure (roads, access tracks, bridges etc.). The properties are interspersed around other softwood plantations including Victoria’s largest plantation manager, Hancock Victorian Plantation (HVP) plantation estate. The land is predominantly flat to undulating, ensuring all future management and maintenance costs remain economic. All sites experience good fertility and high average annual rainfall and the sandy soils (a feature of the region) are easily traversed. All season access for harvest and haulage underpins the strategic value of these well grown (predominately thinned) plantations. The following pages outline the Gippsland Plantation Aggregation, from a state and regional perspective. Page 9
04  STRATEGIC LOCATION THE GIPPSLAND PLANTATION AGGREGATION KEY DETAILS ARE OUTLINED BELOW  Block  Total Area  approx hect...
LOCATOR MAP Sale Moe Traralgon Maryvale Gippsland Plantation Aggregation Morwell Central Gippsland Region Churchill Glomar Beach The Honeysuckles Seaspray Yarram Legend Alberton Softwood Mills Page 10
LOCATOR MAP  Sale  Moe Traralgon  Maryvale  Gippsland Plantation Aggregation  Morwell  Central Gippsland Region Churchill ...
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GIPPSLAND PLANTATION AGGREGATION OVERVIEW PLANTATION SPREAD 05 The age class distribution of the plantations highlight that a significant portion of the estate will become available for harvest and replanting within the next 10 years. Given the distribution of the estate and mature age classes, numerous industry organisations are expected to have a strong interest in acquiring these plantations. In addition to the high quality stands on offer, the purchaser will have the ability to negotiate a suitable wood supply arrangement with Jelfor Treated Timbers for supply of future harvested sawlogs that meet their specified posts and poles specifications. Alternatively, conversion to other forms of highest and best agricultural use is increasingly becoming common practice. The costs of rehabilitation following harvest are now well tested in this market and provide a sound basis for any sophisticated purchaser to determine a suitable acquisition/offer price. The species (Pinus radiata), flat to slightly undulating topography and sandy soil profile ensures grower conversion costs should conversion to highest and best use be favoured following harvest. PRODUCTIVE GROWING CONDITIONS The mean annual rainfall for this plantation region is well understood. The highly productive Central Gippsland Region presents some of Australia’s most productive plantation land. Average annual rainfall for this region varies from 600 millimetres to 1,800 millimetres. The close proximity of the plantations to the coast (ranging 3.75 kilometres to 12 kilometres) ensures cooler coastal influences. The predominate sand-based soil profile and flat to slightly undulating topography ensures easy management practices, although some periodic fertilisation as part of the adopted silvicultural practices will ensure productivity remains high for commercial tree growing for many rotations to come. CERTIFICATES OF TITLE The Gippsland Plantation Aggregation is the amalgam of four plantation properties, incorporating Wulla Wullock, Flints Block, The Bush Block and Prices Road. Comprising a total area of approximately 789 hectares over 5 freehold Certificates of Title, the Gippsland Plantation Aggregation represents an outstanding opportunity to acquire these well-developed mature Pinus radiata forestry plantation properties. Page 13
GIPPSLAND PLANTATION AGGREGATION OVERVIEW PLANTATION SPREAD  05  The age class distribution of the plantations highlight t...
05 GIPPSLAND PLANTATION AGGREGATION OVERVIEW cont. The Wulla Wullock property also features a well-built 3 bedroom two story brick house surrounded by approximately 7 hectares of land located within 4 kilometres of the coast. The Gippsland Plantation Aggregation comprises 5 individual freehold Certificates of Title, legally described as follows: Plantation Property Address Volume Folio Title Area (ha) Wulla Wullock 50B Fields Road, Longford 50A Fields Road, Longford Vol 6695 Vol 9388 Fol 849 * Fol 390 224 43 Flints Block Lot2 Johnsons Road, Longford Vol 10045 Fol 777 86 The Bush Block Lot13A Johnsons Road, Longford Vol 10205 Fol 917 214 Prices Road Lot26B Prices Road, Seaspray Vol 10421 Fol 128 222 Total area (ha) 789 * House block approx 6.89 ha (including 3 bedroom brick house) forms part of this title. LAND USE OVERVIEW The Gippsland Plantation Aggregation has been extensively developed to Pinus radiata (softwood) and comprises the following: Plantation Property Wulla Wullock Flints Block The Bush Block Prices Road Previous Use Vegetation Pasture Vegetation Pasture Plantable Area (ha) Planting Detail Planted in 1990 (47%), 1991 (39%), 1992 (14%) to 1,700 stems/ha Mean Annual Increment (MAI) = est. 18m3/ha, 1st thinning occurred in 2007, 2009 and 2012 Planted in 1993/94 to 1,700 stems/ha Mean Annual Increment (MAI) = est. 18m3/ha, 1st thinning occurred in 2011 Planted in 1995 & 1996 to 1,700 stems/ha Mean Annual Increment (MAI) = est. 18m3/ha, 1st thinning occurred in 2013 Planted in 1998 & 1999 (Northern section) to 1,700 stems/ha Planted in 2000-01, replanted annually until 2008 (Southern section) to 1,700 stems/ha Mean Annual Increment (MAI) = est. 18m3/ha Total area (ha) 222 82 150 200 654 Page 14
05  GIPPSLAND PLANTATION AGGREGATION OVERVIEW cont.  The Wulla Wullock property also features a well-built 3 bedroom two s...
FORESTRY OPERATIONS The Gippsland Plantation Aggregation is located within one of Australia’s premier plantation growing regions. THE CENTRAL GIPPSLAND PLANTATION REGION The Central Gippsland Plantation Region is approximately 109,000 hectares in size (hardwood and softwood plantation), with a large portion established to Pinus radiata. Within the collective 100 kilometre supply zone there are numerous identified plantation estates, which complement these plantation’s overall commerciality and may be strategically unlocked to deliver a wider expansion of the Gippsland Plantation Aggregation. The Gippsland Plantation Aggregation plantations (pictured throughout this document) are ideally positioned within Victoria’s softwood plantation supply zone which benefits from numerous existing softwood timber processing facilities located in Traralgon, Morwell, Yarram, Maryvale and Alberton. In support of these facilities is a buoyant domestic market for all softwood products produced from these mills and sold throughout Australia, whilst export ports located in Melbourne and Geelong (VIC) and Eden (NSW) provide an alternative export market opportunity to meet a growing international appetite for mature softwood sawlogs Page 15 06
FORESTRY OPERATIONS The Gippsland Plantation Aggregation is located within one of Australia   s premier plantation growing...
THE GIPPSLAND PLANTATION AGGREGATION IS BENEFITED BY GOOD CLIMATIC CONDITIONS
THE GIPPSLAND PLANTATION AGGREGATION IS BENEFITED BY GOOD CLIMATIC CONDITIONS
07 CLIMATE AND RAINFALL The Gippsland Plantation Aggregation is benefited by good climatic conditions typical of this well-established plantation forestry region. Ideal temperature ranges are supported by reliable annual rainfall. Underpinned by suitable sandy soils typical of the coastal influences and with adequate nutrient levels, these plantations are productive and can be considered an ideal addition to any existing plantation footprint. CLIMATE AND RAINFALL DATA - LONGFORD TO SEASPRAY, VICTORIA The nearest Bureau of Meteorology weather station to the plantations (East Sale Airport) has recorded the long term average rainfall of approximately 600 millimetres. The mean maximum temperature is 19.6 degrees Celsius and the mean minimum temperature is 8.2 degrees Celsius. Rainfall peaks between October to December influenced by coastal weather patterns, although as show below rainfall is well distributed throughout the year. 30 70 25 60 50 40 15 30 10 20 5 10 0 0 Jan Source: Bureau of Meteorology Feb Mar Apr May Mean Rain (mm) Jun Jul Mean Max. (°C) Page 17 Aug Sep Oct Mean Min. (°C) Nov Dec Ra infall (mm) Te mperature (°C) 20
07  CLIMATE AND RAINFALL  The Gippsland Plantation Aggregation is benefited by good climatic conditions typical of this we...
08 CONCLUSION The sale of the Gippsland Plantation Aggregation provides the market with an extremely rare opportunity to secure premium plantation holdings within one of Australia’s most highly regarded plantation regions. Ideally located, these well managed assets provide a logical addition to any Timber Investment Management Organisation or timberland investor operating within Victoria. To reiterate, the key investment benefits of the Gippsland Plantation Aggregation are: • High quality individual forestry properties set across approximately 789 hectares, 654 hectares planted (Pinus radiata). • Sites are ideally located to benefit from continued plantation management or conversion to alternative uses. • Good average rainfall, good soil productivity and strategic location to timber processing markets. • The properties comprise well managed mature commercial Pinus radiata plantations. • The plantations have been professionally managed throughout rotation. • Commercial thinnings have occurred on-time, yielding a complete range of softwood products. • All sites have been well designed for harvest, front developed roads and maintain excellent year round vehicle access and good firebreak protection. • Unencumbered freehold title (trees and land - no third party interests). • A suitable wood supply agreement for those posts and poles (within specification) emanating from the plantations can be negotiated with Jelfor Treated Timbers further securing the investment. It has been SAI’s pleasure to provide you with the above information in relation to this outstanding offering. We encourage your further consideration of the Gippsland Plantation Aggregation and look forward to hearing from you in due course. For further information please contact: David Smith Smith Agri International +61 418 332 780 david.smith@smithagriinternational.com.au Page 18
08  CONCLUSION  The sale of the Gippsland Plantation Aggregation provides the market with an extremely rare opportunity to...
09 DISCLAIMER This Information Memorandum has been prepared by SAI. The information in this Information Memorandum and any other written or verbal information given in respect of the Property referred to in this Information Memorandum (“the Information”) is provided to you (“the Recipient”) on the following conditions: 1. The Property is to be sold on an “as is/where is” condition (that is, in its present condition and subject to all legal and physical defects). 2. No assurance, representation, warranty or guarantee (express or implied) is given by the Vendor, SAI or any of their respective officers, employees or consultants (collectively referred to as the Parties) or any other person or entity that the Information, whether or not in writing, is complete, accurate or balanced, or has or will be audited or independently verified, or that reasonable care has been or will be taken in compiling, preparing and furnishing the Information. 3. The Information does not constitute, and should not be considered as, a recommendation in relation to the purchase of the Property or any other matter, or as a solicitation or offer to sell the Property or a contract of sale for the Property. 4. The Information shall not constitute an assurance, representation, warranty or guarantee that there has been no change in the Property or in the matters referred to in the Information since the date at which the Information is expressed to be stated. 5. The figures and calculations contained in the Information are approximate and are based upon figures obtained from external sources which have been relied upon without verification by the Vendor or by SAI or any of their respective officers, employees or consultants. As previously highlighted, a Recipient should undertake their own due diligence investigations to obtain exact figures relating to the Property. 6. The Information contains statements which are in the nature of forward-looking statements. To the maximum extent permitted by law, no representation or warranty is given and nothing in the Information or any other information made available before or during the sales process is or should be relied upon as a promise or representation as to the condition or future operations of the business and/or assets being sold. Statements, assumptions or other information in the Information which relate to future matters or any other information made available before or during the sales process as to future matters may prove to be incorrect. The operation of the business and/or assets has been, is and will be influenced by a large number of factors. Each Recipient should make its own investigations and rely on its own inquiries regarding assumptions, uncertainties, variables, contingencies, risks and other factors which may affect the operations of the business and/or assets being sold. Page 19
09  DISCLAIMER This Information Memorandum has been prepared by SAI.  The information in this Information Memorandum and a...
09 DISCLAIMER 7. None of the Parties assume any obligation to the Recipient to provide additional Information or updated Information or to correct any inaccuracies in the Information which may become apparent. 8. The Information should not be relied upon in any way by the Recipient or its related entities, their respective officers, employees, agents, advisors, shareholders and associates (collectively the Recipient Parties). The Recipient Parties should satisfy themselves as to the accuracy and completeness of the Information through inspections, surveys, enquiries and searches by their own independent consultants. 9. All Recipients should seek independent legal and financial advice. The Parties will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information a Recipient relies upon that is contained in the Information or any other marketing material. 10. None of the Parties make any representations or warranties with respect to the continuation or enforceability of any licence, lease, supply, service, consultancy, certification, standard or other agreement referred to in the Information following completion of the sale of the Property. 11. Not all fixtures and fittings on the Property may be available for sale and the Vendor and SAI reserve the right to remove any item on the Property from sale at any time. 12. None of the Parties make any representations or warranties with respect to fixtures, fittings, plant and equipment on the Property. 13. None of the Parties make any representations or warranties with respect to the legality of the current use of the Property or the ability of any purchaser to redevelop the Property. 14. The Information does not and will not form part of any contract of sale for the Property. If any Recipient Party makes an offer or signs a contract for the Property, that Recipient Party represents that it is not relying on the Information supplied by any of the Parties (unless otherwise agreed in a written contract with the Vendor). The only information, representations and warranties upon which the Recipient Parties will be entitled to rely will be as expressly set out in such a contract. Page 20
09  DISCLAIMER  7.   None of the Parties assume any obligation to the Recipient to provide additional Information or updat...
09 DISCLAIMER 15. Recipients will be responsible for meeting their own costs of participating in the sale process for the Property. The Parties shall not be liable to compensate any Recipient Parties for any costs or expenses incurred in reviewing, investigating or analysing any information, whether that information is contained in the Information or otherwise. 16. None of the Parties are liable to compensate or reimburse the Recipient Parties for any liabilities, costs or expenses incurred in connection with the sale of the Property. 17. Except as may be expressly provided in any agreement in writing between the Parties and the Recipient, the Recipient acknowledges and agrees (for itself and the other Recipient Parties) that to the maximum extent permitted by law, all terms, conditions, warranties and statements, whether express, implied, written, oral, collateral, statutory or otherwise, relating to the Information and the sale of the Property are excluded, and each of the Parties disclaim all liability for any loss and damage (whether foreseeable or not) suffered by any person acting on any of the Information whether the loss or damage arises in connection with any negligence, default or lack of care on the part of the Parties, any misrepresentation or any other cause by reason of or in connection with the provision of the Information or by the purported reliance thereon by any of the Recipient Parties. 18. The Information is confidential. The Information must not be reproduced, transmitted or otherwise made available or communicated to any person other than the Recipient Parties without the prior written approval of the Vendors. The Recipients acknowledge and agree that upon deciding that they do not wish to proceed with the purchase of the Property, or at the request of the Parties, they will immediately return the Information together with any reproduction thereof. 19. To the extent that any of the above paragraphs may be construed as being a contravention of any law of the State of Victoria or the Commonwealth, such paragraphs should be read down, severed or both as the case may require and the remaining paragraphs shall continue to have full force and effect. This disclaimer is additional to the contract and survives execution of the contract. Page 21
09  DISCLAIMER 15.   Recipients will be responsible for meeting their own costs of participating in the sale process for t...
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The information set out in this document has been prepared using information derived from a variety of external sources and is intended as a guide only and may be subject to change. SAI does not warrant the accuracy of any of the information and does not accept legal liability or responsibility for any injury, loss or damage incurred by the use of, reliance on, or interpretation of the information contained herein. This confidential document is for the sole use of persons directly provided with it by SAI and it is not to be resupplied to any other person without the prior written consent of SAI. Use by, or reliance upon this document by any other person is not authorised by SAI and without limitation to the above disclaimers, SAI are not liable for any loss arising from such unauthorised use or reliance.
The information set out in this document has been prepared using information derived from a variety of external sources an...