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Investing in Forestry: demand continues to increase for this sustainable and tax-efficient investment

Demand for forestry has more than doubled since 2011, with 14,400 hectares of commercial forestry sold in the UK in 2019 with a market value of just over £121 million. Analysis of the forestry market shows that the average gross value increased by 17% in 2019.[1]

TIME Investments has a long track record of managing commercial forests and investors have held forestry investments since 2005 as part of a diversified portfolio in our Corporate IHT service, TIME:CTC.

 

Why forestry is an attractive investment opportunity

Commercial forests and woodlands are regarded as an increasingly important long-term asset class by UK investors because of their attractive investment characteristics.

  • Forestry typically has a low correlation to other mainstream asset classes, making it an effective diversifier.
  • Investors in forestry have the opportunity to benefit from inherent organic growth.
  • Capital appreciation should be delivered through the increasing volume of timber as the crops grow – as larger trees can be processed into higher value timber products – and the value of the underlying land may also increase.
  • The introduction of biomass energy installations in the UK and overseas is expected to further increase demand for timber production.

 

“Forestry assets are becoming increasingly popular with investors because they provide access to a sustainable investment, but also one that we believe offers low volatility and stable returns. Our research shows that 58% of retail investors said they need to think more about the future of the planet for their children – forestry helps them tick this box.”[2]

Stephen Daniels, Head of Investments at TIME Investments

 

TIME has acquired one of the UK’s largest privately owned forests, Barracks Forest in Perthshire, Scotland.

TIME is an experienced forestry manager and this latest acquisition adds to the existing portfolio of forestry investments held within our Inheritance Tax (IHT) service, TIME:Advance.

Forestry investments, such as Barracks Forest, are typically tax-efficient and can offer attractive long-term returns to investors.

Barracks Forest offers over 11,000 acres of fast growing Sitka spruce and pine trees, which provide FSC certified wood and timber for a range of products and markets including paper and cardboard, which are increasingly being used as alternatives to plastic as demand for sustainable materials continues to increase.

Location

TIME:Advance also owns a biomass plant in close proximity to Barracks Forest, where the timber can be used to generate clean energy, reinforcing its commitment to sustainable investments.

The proximity of Barracks Forest to our biomass site at Acharn offers an opportunity for vertical integration, as the small roundwood from the forest can be sold to the biomass site and used to generate clean energy.

The addition of Barracks Forest to the TIME:Advance portfolio, which also includes wind, solar and hydro renewable energy, means that three quarters of the portfolio is invested in sustainable and positive impact investments.

 

To learn more about TIME:Advance, please click here. Or get in contact via email at questions@time-investments.com

 

 

[1] https://www.savills.co.uk/research_articles/229130/299424-0/spotlight–the-forestry-market—april-2020

[2] Research conducted by Consumer Intelligence from 19-22 June 2020. Sample size 1049.

Posted: 07/10/2020 Categories: News