I've had several requests for an update on issues surrounding timberland investments and transactions to date for 2011 so I am posting a chart of the transactions of which I am aware. I will also make a comment or two on conservation easements and on who is buying timberland today. The following table shows the transactions that I have in my database for 2011 as of the end of October.
Forest Company evaluates the woods too high in their reports according to the business magazine SvD. At weaker quarter, forest companies assess their forest resources and exploit the forest to clean up quarterly results according to analysts. According to analysts SvD Näringsliv been in contact with it is common that companies use their forest assets to report higher individual results, for example, during a quarter in which they have high recurring costs. The analysts suggest that companies may give a false picture of their performance.
Global Forest Partners LP (GFP) has put up for sale the plantation forests, freehold land and carbon assets held jointly by two of its New Zealand-based timber funds. The estate comprises 15 individual forests with a net productive area of 16,533 hectares (ha), of which 30%, or 5,015 ha, is freehold. The estate’s remaining 11,518 productive hectares are managed under Crown Forestry Licenses (CFLs).
UK forestry investments have outperformed the commercial property markets for the fifth year in a row, according to the Investment Property Databank (IPD) UK Forestry Index.
Rising timber prices drove returns on forestry investment last year to their highest level since 2007, at 20 per cent. This is an increase of almost nine percentage points on the 11.1 per cent total return seen in 2009.
In 2010 returns were roughly on a par with rates achieved in 2006, although not as high as the 31.6 per cent seen before the economic downturn in 2007.
Oxenøen, Norway, May 3, 2011 - Norske Skog sells forest areas in Brazil as part of the work to improve the company's financial position
Norske Skog has entered into an agreement with CMNPAR Four Participacoes S.A., a Brazilian company advised by Global Forest Partners LP, a US based, SEC registered investment advisor, for the sale of around 21 500 hectares of forest in Brazil, of which 10 500 hectares are productive forest.
My last post generated a couple of comments that referenced FIRPTA (Foreign Investment in Real Property Tax Act) and the likely impact that the law would “keep Asian demand in U.S. timberland muted”. The law has been around since 1981 so I thought that I would take a look at what the impact of foreign investment on timberland has been to date.
This comprehensive, groundbreaking report details the potential of sustainable forestry to protect and enhance forests worldwide, while fostering economic growth and ecological values. Whether you are a forestland owner, policy-maker, private investor or philanthropic grant-maker, "Capital Markets and Sustainable Forestry" will expand your understanding of both the opportunities and the challenges of scaling up sustainable forestry as a profitable business model.
The government's announcement that it is postponing the sale of 15 per cent of the Forestry Commission estate, in order to review the site-by-site criteria for disposal is a first victory in the massive grass-roots anti-privatisation campaign.
We have a country-wide wave of anger swelling that has attracted levels of support for the public forest estate of the same order as that for the NHS or free education.
Timber REIT (FTR) Index of public timber REITs (Real Estate Investment Trusts)
has returned 24.10% year-to-date compared with 5.69% for the S&P 500 (as of February 11, 2011) reports Forisk consulting at their blog.
