At the offices of BNP Paribas in Marylebone recently, I listened to a joint presentation by forestry industry leaders Tilhill Forestry and John Clegg & Co as they released the 20th edition of the annual Forest Market Report and I am delighted to say that it contains some very exciting news for investors in commercial forestry.
The report points out that standing timber prices have rocketed by around 30% over the last 12 months as a result of a huge increase in demand for finished timber products and a weaker Pound, making imported timber more expensive.
The commercial forestry market was described as “brisk and robust” with “exceptional depth” from buyers, in particular from processing plants seeking product for their sawmills.
A total of £104.2m of forest properties traded in 2018; representing 80% of the market. The balance of activity was traded “off-market”. The number of plantations traded dropped on 2017 but the values were much higher.
Forestry investments remain one of the highest performing assets in 2017 with a total return of 13.9%, a rise from 9.9% in 2016 and just below the ten-year average of 15.7% per annum.
The report highlights growing demand for timber across a range of products including timber frames for housing construction and a continued shortage of supply for both the short and long-term. Despite Government targets for replanting, of the 30,000 hectares harvested in 2017 only 52% has been re-stocked. At the moment, timber price growth shows no signs of settling.
As investment advisers who believe in the value of a properly diversified investment portfolio that includes real assets, we believe that commercial timber continues to offer significant and compelling reasons to invest for the long-term.
The full report is available HERE
A new share offer for commercial timber investment is currently available. If you would like to discuss the suitability of this investment please do not hesitate to call Steve, David or Lev on 01494 683100.