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Forestry Investment News
Timber investments still outperforming other asset classes
28/06/2010
UK forestry investment has outperformed other asset classes in the last three years, with fund managers turning to the Sitka spruce as a preferable low risk investment over more traditional alternatives.
Figures from the industry's benchmark provider, Investment Property Databank, showed that by the end of 2009 investments in British forests were giving 16.1 per cent returns on an average three-year annualised basis.
That figure showed it outperforming UK equities, fixed income and commercial property – which gave returns on investment of minus 1.3 per cent, 6.9 per cent and minus 8 per cent respectively
Stephen Daniels, of Close Asset Management, which owns 7,500 acres of commercial softwood in Scotland and Wales said forestry returns had been "spectacular".
"We buy semi-mature and mature forestry plantations, both from private individuals and, more recently the Forestry Commission," he said. "We seek a modest return from our forestry plantations, coupled with capital stability and the 100 per cent relief from inheritance tax."
The numbers marked the fourth consecutive year that forestry assets outperformed the main market, highlighting the increasing demand for timber and land-based assets. Though it is still a niche investment market globally, some of the biggest US endowment funds have procured millions of acres of north American forests.
Figures from the industry's benchmark provider, Investment Property Databank, showed that by the end of 2009 investments in British forests were giving 16.1 per cent returns on an average three-year annualised basis.
That figure showed it outperforming UK equities, fixed income and commercial property – which gave returns on investment of minus 1.3 per cent, 6.9 per cent and minus 8 per cent respectively
Stephen Daniels, of Close Asset Management, which owns 7,500 acres of commercial softwood in Scotland and Wales said forestry returns had been "spectacular".
"We buy semi-mature and mature forestry plantations, both from private individuals and, more recently the Forestry Commission," he said. "We seek a modest return from our forestry plantations, coupled with capital stability and the 100 per cent relief from inheritance tax."
The numbers marked the fourth consecutive year that forestry assets outperformed the main market, highlighting the increasing demand for timber and land-based assets. Though it is still a niche investment market globally, some of the biggest US endowment funds have procured millions of acres of north American forests.
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