The company Kiland, formerly Kangaroo Island Plantation Timbers, has appointed a specialist property manager to oversee the transition of its lands from forestry to agriculture.
This includes tree and stump removal, biomass disposal, and then site preparation, fencing and water infrastructure on 18,696 hectares of its forestry land.
In an announcement to the Australian Securities Exchange, Kiland says it selected AAGIM Investment following a public tender process.
Kiland's wholly owned subsidiary Kangaroo Island Land Assets Limited, which holds or will hold all of Kiland's agricultural properties, has entered into the property management agreement with AAGIM.
AAGIM will develop a Master Plan for Kangaroo Island Land Assets Limited to be approved by Kiland.
The Master Plan will include a multi-year operational plan and detailed funding requirements.
During the operations phase AAGIM is to provide:
- Risk, environmental and stakeholder management
- Estate management including land access and licencing, procurement, planning and accounting
- Tree and stump removal, Biomass disposal
- Site preparation, fencing and water infrastructure build out, as well as planning and executing all agricultural activities required to manage KILA's estate.
In exchange, AAGIM will be paid an administration fee: of $450,000 per annum and an activity fee of $15 per arable hectare per annum for hectares that remain under management by AAGIM.
Kangaroo Island farmers and Ag KI have welcomed the announcement.
"Ag KI believes the best outcome is for the trees to be returned to productive farmland as soon as possible," chairman Jamie Heinrich said.
"It's up to the private landholders to determine what and how they do this, but we in general support a move towards this large area of KI once again becoming highly productive farmland that benefits the local economy and community."
Mayor Michael Pengilly echoed these sentiments, saying the Island was keen to move on from the failed forestry experiment back to agriculture and "the sooner the better".
AAGIM CEO Marcus Elgin said, "We are pleased to be appointed property manager and look forward to leveraging our extensive transformational agriculture experience to develop Kangaroo Island Land Assets Limited's portfolio of high rainfall, high production assets into an institutional grade estate."
Kiland executive chairman James Davies said, "AAGIM are the right partner for this project. We look forward to working with Marcus and his team in developing a top tier institutional grade agricultural estate. The terms of the property management agreement incentivise AAGIM and ensure alignment of interest with Kiland shareholders."
The statement says AAGIM is a leading private account and direct investment manager focused on the Australian farmland sector.
AAGIM has managed assets in sheep for meet and wool, dairy, beef row crops and permanent plantings since 2005 for family offices, institutions and sovereign funds.
Over the past 11 years AAGIM have managed over 100,000 hectares of forestry-to-agriculture farmland improvement including harvest, land improvement, farm design and management of ongoing agricultural operations.
Kiland meanwhile on Dec. 21, 2021 announced that its wholly owned subsidiary KI Seaport had entered into a conditional sale agreement for its pontoon asset for $6.06 million.
Kiland confirmed to the Australian Securities Exchange that the pontoon was sold to Berkshire Seas and the funds will be applied to the costs of reverting the estate to agriculture.
Kangaroo Island Plantation Timbers in 2017 announced it had bought a pontoon from Hyundai Heavy Industries in South Korea to form the berth face for the KI Seaport planned for Smith Bay.
The 167-by-40-metre-wide structure was being refurbished at the Dung Quat shipyard, Vietnam.