Alternative Investments Update – Commercial Forestry “Another Robust Year for Forestry”

Haregrain sunny

A few weeks ago, we attended the 2019 UK Forest Market Report, presented by Tilhill Forestry and John Clegg & Co in the City of London.

We were delighted to find that it has been another impressive year for commercial forestry. The key findings of the report include:

  • 23% year-on-year rise in average forestry values to £11,478 per stocked hectare-
  • 21% increase in the total value of the forestry market

In addition to the strong financial returns from cropped and growing timber, we noted the increase in land values for tree planting where prices have doubled in the past two years in some regions of Scotland. The outlook for UK forestry remains extremely positive, underpinned by significant and growing demand from the construction industry, a shortage of supply and the huge potential for income for sequestering carbon.

It is also evident that there is a growing interest from new private investors who are recognising the benefit of having such a fundamental ‘real’ asset as part of a diversified investment portfolio.

Most of our clients invested in forestry have done so through syndicated forest funds. These benefit from economies of scale, professional management, lower entry costs and very favourable tax advantages, including exemption from Inheritance Tax once held for two years. Over the past 10 years to 31st March 2019, the GHAM timber index has increased at an annualised rate of 12%. Syndicated funds have seen similar annualised returns over the same period. Income from the sale of timber is tax-free.

If you would like to read the Forest Market Report 2019, please click on the following link:

https://www.johnclegg.co.uk/site/uploads/press/ForestMarketReport_2019.pdf

If you would like an update on your forestry investment or further information as to how you can invest, please call me on 01494 683100 or e-mail steve.wilson@2hwealthcare.co.uk