Overseas investment decision for case 200520062 - New Zealand Sustainable Investments Fund 1

25,612.4185 hectares of freehold comprising:

1. 3,430.2166 hectares situated at various forests situated in the Bay of Plenty/Coromandel region being various CTs;
2. 13,340.1954 hectares situated at various forests situated in the Gisborne/Hawkes Bay region being various CTs;
3. 1,598.1807 hectares situated at various forests situated in the Waikato region being various CTs; and
4. 7,243.8258 hectares situated at various forests situated in the Northland region being various CTs.

To acquire:

1. property being to acquire 12 forests from Evergreen Forests Limited; and
2. an estate or interest in land which together with any associated land exceeds 0.4 hectares and includes/adjoins a lake the bed of which exceeds 8 hectares in area; and
3. an estate or interest in land which together with any associated land exceeds 0.4 hectares and includes/adjoins land that exceeds 0.4 hectares held for conservation purposes; and
4. an estate or interest in land which together with any associated land exceeds 0.4 hectares and includes/adjoins land that exceeds 0.4 hectares which is deemed a heritage or historic area; and
5. an estate or interest in land which together with any associated land exceeds 0.4 hectares and includes/adjoins land that exceeds 0.4 hectares which is provided as a reserve, a public park, for recreation purposes, or a private open space; and
6. an estate or interest in land which together with any associated land exceeds five hectares in area.

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the Applicant has business experience and acumen relevant to and is demonstrating financial commitment towards the investment. The Overseas Investment Office is further satisfied that the persons who exercise control over the Applicant are of good character and not the kind of persons referred to in section 7(1) of the Immigration Act 1987.

The Applicant (JFFML) is the funds management division of the Mirvac Group and is wholly owned by Mirvac Limited. Mirvac Group is listed as a stapled security with Mirvac Property Trust on the Australian Stock Exchange. The Applicant proposes to acquire 12 forests from Evergreen Forests Limited (Evergreen) and Rawanui Farm Limited as trustee for the New Zealand Sustainable Investments Fund 1 which comprises Australian unit holders. The forests comprise 25,612.4185 hectares of freehold land and 11,477.9 hectares of forestry rights.

JFFML is pursuing a strategy of seeking superior investment returns from both timber related activities and through the development and implementation of environmental services. JFFML is implementing this policy by investing and managing sustainable forests. The acquisition of the subject forests will provide JFFML with the ability to harvest and replant the forests over a period of time.

In February 2004 JFFML established an unlisted environmentally sustainable infrastructure fund, the Australian Sustainable Investment Fund (ASIF) to acquire land holdings and interests in land with forestry and/or forestry based rental income streams. The principle strategy of ASIF is to enhance these forestry income streams by implementing sustainable value adding from activities such as carbon credit sales, renewable energy incomes (eg wind farm rentals and biomass sales), agistment income from livestock grazing and biodiversity salinity credits.

JFFML is intending to continue negotiations that have already commenced between Evergreen and Mighty River Power in relation to a wind farm installation on the Rototuna Forest (situated in Northland). In addition JFFML is also considering the viability of a wind farm operation in the Waiau Forest and West Ho Forest (situated in the Gisborne District), and installing biomass energy facilities at the same locations as the wind farms. JFFML will be entering into negotiations with major energy sector companies in the last quarter of 2005. The biomass energy facilities utilise the non-commercial thinning waste and by-products from forestry operations.

The proposal is likely to result in the following benefits:

the creation of new employment opportunities; and

increased efficiencies and productivity resulting from additional investment in silviculture and improved forestry returns through the determination of optimal harvesting points.