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Introducing: Terra Verde Investments LP
An opportunity to access inflation protected forecast cash returns of 8.5% p.a. from a passive investment in a portfolio of New Zealand permanent forests.
Terra Verde Investments LP will acquire a portfolio of up to four high quality properties growing permanent forests. The investment is forecast to provide investors with strong, inflation adjusted returns from a long-term triple net lease to entities in New Zealand Carbon Farming group (NZCF), one of New Zealand’s largest private landowners.
What is the return?
This passive investment is uniquely structured to provide consistent cash returns and capital preservation in today’s high-inflation, high-interest rate environment. A 19-year1 triple net lease, where the lessee meets all costs, and annual CPI adjustment (uncapped, rising floor) provides investors with an initial forecast distribution of 8.5% p.a., paid monthly. For the first two years, the partnership will receive the higher of either rental income that generates a 8.5% p.a distribution or a CPI-adjusted lease.
How is Terra Verde Investments structured?
Terra Verde Investments LP aims to provide a diverse portfolio of properties, with geographic spread and varying ages of plantation. The Partnership is looking to raise $20.6 million in capital to buy three properties with the provision to take over-subscriptions to purchase a fourth property. The diversified forestry age and location gives investors the potential for development margin and spreads risk.
The investment is proposed to be funded conservatively with a loan to value ratio (LVR) of 20%.
Why Permanent Forestry and NZCF?
Permanent forests play a major role in decarbonising the global economy. Terra Verde Investments LP is unique as investors can support this important initiative and earn attractive returns without direct exposure to operational and commodity risks. NZCF is one of New Zealand’s leading experts in permanent carbon forestry, with 100,000 ha of forestry assets either owned or leased by the group. They will oversee the Terra Verde properties and are committed to actively managing these forests for native regeneration. Over decades, what started as a pine forest will be nurtured to revert to an income-generating native carbon forest via strategically located native seed sources and a strong pest management programme.
* Forecast initial distributions based on contributed capital.
1 Weighted Average Lease Term (WALT) for the proposed portfolio of properties.