Investment Thesis
Forestry is a proven asset class for institutional and private investors. Recent returns have been driven by rising land values and increasing timber prices.
The combination of value in a naturally growing commodity and the security of ownership of the underlying land provides investors with income and long term capital appreciation in a sustainable and tax efficient manner.
Negative correlation with other asset classes can provide extra diversification while helping reduce volatility.
Commercial Forestry Returns
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We realise value by harvesting the crop or disposing of the asset. Returns are driven by three component parts;
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Biological growth of the crop
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Increases in the value of timber
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Increases in the value of land
Industry Trends
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Increased demand for housing in the developed world
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Increasing use of wood in construction
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Rising consumption per capita in the developing world
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Development of new timber markets
Tax Benefits
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Tax free income
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Tax free capital gains
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Capital gains roll-over
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Reduced inheritance tax after 2 years of ownership
New Timber Markets
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Biomass energy generation
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Cross Laminated Timber use for construction
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Traditional packaging changes - as consumers and governments continue to reduce the use of plastics
Secular Drivers Behind Timber Demand
TRADE & COMMERCE
Construction
Packaging
POPULATION
Furniture
Home renovation
Energy
Urbanisation
SCARCE RESOURCE
Animal & Plant Species
Woodland Naturalisation
Water
NEW MATERIALS
& APPLICATIONS
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Smart Packaging
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CLIMATE & ENVIRONMENT
Carbon Emissions/Credits
Recreation/Health
Biodegradability
Biomass
GROWTH
DRIVERS