Timberland Valuation and the global economic crisesThe issue in today’s post concerns why the transaction price of timberland has shown little or no decline in value but the stock price of the publicly traded companies that own timberland has declined dramatically. I will also look at what I think is happening in the timberland market today and how I see the market for timberland investment. But first, let’s set the stage.
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Forestry returns outperform the rest over three years
London, 24th June 2009: Investment in forestry outperformed domestic commercial property and equities last year, producing a positive annual total return of 7.0%, eclipsed only by bonds, according to the IPD UK Forestry Index.By comparison, UK commercial property delivered -22.11%; UK equities returned -29.92%, while listed property companies and trusts were the most vulnerable to the global market downturn, returning -46.63% over 2008. Bonds, however, gained 154%.
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Study shows trees have impact on Georgia’s economyAs Americans mark National Forest Products Week from Oct. 18-24, a new report shows Georgia’s forest products industry has a significant impact on the state’s economy.
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Timberland transactions in the US 2009Major timberland transactions have slowed considerably but some continue to close. I wrote an article for Forest Landowners Magazine (THE TREND IN TIMBERLAND PRICES) that was supposed to be published in October but the publishing date was postponed until late November so I thought I would do a little update on transactions to date for this year. From the list below, you can see that there are quite a few transactions but relatively few large ones.
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Is Timber an Overhyped Investment?U.S. TIMBERLAND MAY BE ONE OF THE WORLD'S most overvalued asset classes.
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Disney Invests in ForestryThe Walt Disney Company intends to invest US$7 million in forest conservation projects in the U.S.A, the Amazon and the Congo Basin in an effort to reduce its greenhouse gas emissions.
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Issue date: Thursday, January 21, 2010 The national US forest harvestOver the past 20 years there have been many changes impacting the output of our nation's timberland but none have impacted it as much as the management of our National Forests. First, let’s talk big numbers and try to put the whole thing into perspective.
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Earth Capital Partners hires sustainable agriculture and forestry team
Earth Capital Partners, a private equity firm focused on renewable energy, has hired a sustainable agriculture and forestry investment team from IBIS Capital Management and EMP Global.
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Fink's green fund hires for agriculture investment
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China Forestry buys RMB 464-mln forest assetMar. 1, 2010 (China Knowledge) - China Forestry Holdings Co Ltd has announced that it will spend RMB 464 million to purchase rights in a forest in Ninglang County, Yunnan Province.
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WBCSD: Sustainable Forest Finance Toolkit Now AvailableGeneva, 22 February 2010 - PricewaterhouseCoopers (PwC) and the World Business Council for Sustainable Development (WBCSD) have launched the Sustainable Forest Finance Toolkit, which aims to support the finance sector in
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Forest Investors Grapple with Sustainability Investor interest in forestry is building, driven by climate change concerns, shifting and growing markets for forestry products – and the good, old-fashioned portfolio diversification benefits of an asset class which weathered the financial crisis much better than most and which offers stable long-term returns. But, argue sustainable finance experts, barriers to monetizing the environmental attributes of the sector remain high – both retarding investment but also generating opportunities for early movers.
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Tree-planting drive to earn Kenya revenue
Investors from industrialised countries are racing to strike financing deals with Kenya in partnerships set to open new avenues for donor support as the world switches to green economy.
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Sino-Forest Increases Investment in Greenheart Resources Strengthening foothold in South American tropical forestTORONTO, May 9, 2010 /CNW/ - Sino-Forest Corporation ("Sino-Forest") (TSX: TRE), a leading commercial forest plantation operator in China, is pleased to announce that Sino-Capital Global Inc.
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As the adage goes, the best time to plant a tree is 20 years ago; the second best time is now.
Ideally, investors planted their money into forestry early enough to see their money grow along with the recent surge in commodity and equity prices.
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The World Bank Issue Brief: Forestry
- Forests cover between 25 and 30 percent of the earth’s land surface. They help to maintain the fertility of the soil, protect watersheds, and reduce the risk of natural disasters such as floods and landslides.
- About 350 million people worldwide depend on forest resources for their livelihood—of those, 50 million (especially indigenous communities) are wholly dependent on forests.
- About 65% of the total primary energy supply in Africa comes from biomass (30% in South Asia, 15% in Latin America and East Asia).
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Major American pension fund puts confidence in timberConfidence in timber investment funds has been heightened after a major American state pension fund decided to put $500 million into timber.
Massachusetts Pension Reserves Investment Management Board (Mass PRIM) has decided to make the investment just three years after selling a $700 million section of its timber portfolio.
Senior timber investment officer at Mass PRIM, Tim Schlitzer, said it was a perfect time to reinvest in the long-term benefits that timber can provide.
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Green investment boom expected in next decadeThe next decade should see a rising wave of investment in green funds, leading financiers are predicting.
Research firm Prequin said green investment funds have gathered $12 billion to spend worldwide, with a further $26.7 billion on the horizon.
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US-South Timberland Transaction updateThe pace of timberland transactions is still pretty slow but they are occurring (about 500,000 acres since my update last fall) and prices do not appear to have dropped below those of late last year. I think the 10% - 15% decline estimate (from the peak) is still pretty solid.
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A brief TIMO backgrounderIn discussions with newcomers considering investments in timberland or the publicly traded timber REITs, I frequently find that there is substantial misunderstandings about what a TIMO is and what the TIMO role is in the investment community.
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That’s Billion Dollars, With a “B”Most dividend announcements are in the range of pennies to several dollars, so when a company declares a special dividend of USD 5.6 billion, it tends to grab your attention, and that of shareholders.
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Turning income into capital without taxation in this world is like trying to spin straw into gold, impossible unless you know Rumpelstiltskin.
Well as it turns out he and I are on quite friendly terms and it was he who introduced me to forestry investments.
Most governments are eager to support any activities that they regard as beneficial or that allow tax planning to continue if it delivers a public benefit.
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Seeing the Forest for Its HedgesFOR decades, some university endowments, pension funds and other big investors have put part of their money to work in the woods. They’ve bought large tracts of timberland, viewing them as an asset class separate from stocks, bonds and other forms of real estate.
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Should Timber Investments Be Part of Your Investment Portfolio?Timber and timberland have traditionally been investment vehicles for institutional investors because of the amount of capital required. There are however, excellent opportunities in today’s timber and timberland investment marketplace for small retail investors.
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Timberland Investment Resources Introduces European Hedge Fund
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Forest Industries Investment and Financing ForumArgentina 16-17 November 2010
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Misreporting on WeyerhaeuserTimberland and timber REIT (real estate investment trust ) investors continue to wade through "erroneous and underreported analysis in financial outlets" writes Forisk blog which is a forest economics research firm. In a recent article Weyerhaeuser , now structured as a REIT, was called the worst performers in S&P. The Forisk blog show the comparative performance of the three publicly traded timber REITs: Plum Creek (PCL), Rayonier (RYN), Potlatch (PCH); and Weyerhaeuser. Read blogg
There are also reports far more positive about Weyerhaeuser
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Johann Hari: For sale - Cameron's green credentialsCan you hear the silence of the huskies? When he was rebranding the Tory party, David Cameron promised us he would lead "the greenest government ever". Since he came to power, he has broken every environmental promise he made – and then gone much further.
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Norske Skog sells propertiesNorske Skog has entered into an agreement concerning sale of Klosterøya to a consortium consisting of Conceptor Eiendomsutvikling AS and Bratsberg Gruppen AS, and has at the same time also finalised sale of a property at Nedre Ranheim.
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Weyco Earnings and Timberland Sale
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National Trust moves to save Forestry Commission woodlands
The National Trust could step in to save the Forestry Commission's English forests, which the Government wants to sell off.
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US Timber REITs has returned 24.10% year to date
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.
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What wood you do to stop this?
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.
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Capital Markets and Sustainable Forestry
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More Thoughts on Foreign Investments in Timberland
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.
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Norske Skog Sells Forest In Brazil
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.
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Rising timber prices drive up forestry returns
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.
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Exclusive: OneWest gains a ray of hope for Paulson in glum times
(Reuters) - John Paulson's roll of the dice on a lender that rose from the wreckage of the financial crisis is emerging as one of the few big winners for the hedge fund manager in what is shaping up as a downbeat year.
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Forester Gunns to sell softwood forests in Australia's Green Triangle
Australian timber group Forester Gunns is to sell some of its softwood forests for AU$107 million (£69 million).
The sale to a US-based timber investment management organisation includes 46,000ha with pine trees in the Green Triangle region of South Australia, with Forester Gunns retaining some harvesting rights to the plantations.
It is understood that the deal is subject to the buyer securing finance and other customary approvals. Forester Gunns has declined to provide further details about the agreement or the buyer.
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USA - GFP puts forests on marketGlobal 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.
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2012 Forestry Finance event call for presentationsThe Forest Industry Engineering Association together with most of the major financial and forestry industry associations in Australia and New Zealand ran an inaugural Future Forestry Finance Conference series in Sydney and Auckland in early March 2010. The turnout exceeded expectations.
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Forestry Investments in Emerging Marketsnvestments in forestry have many desirable features. Under certain conditions, forestry investments yield attractive returns to investors and can contribute substantially to the economic, social and environmental development of countries.
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Forestry Acquisition, MozambiqueObtala Resources Limited (AIM:OBT), the natural resource investment and development company, today announces that it has concluded a Share Purchase Agreement (”SPA”) to acquire a private Mozambique registered company (”Acquisition”).
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FRA Claims Timbergrow Limited Purchase Could Be Good for SustainabilitySeattle, WA, August 03, 2011 -- A Malaysian forestry firm has bought a large portion of forest land in New Zealand, which could boost sustainable forestry in the region, according to Forestry Research Associates (FRA).
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FSA warning over carbon credit trading schemes
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Some Timberland Transactions and Other Stuff 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
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FRA claims Irish forestry investment is a ‘good bet’The sale of 20 forestry plantations in Ireland has received the backing of FRA, which supports investment in sustainable forestry projects around the world.
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Ugandans Invest in Trees, For Profit, ConservationWealthy investors in Uganda are taking advantage of a new money-making opportunity investing in trees. Trees have become an attractive investment because of the rising cost of timber and the allure of carbon credits. The Ugandan government sees these so-called "tree banks" as a means to combat deforestation. But practice remains controversial.
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Buy Timber Stocks and Watch Your Money Grow on Trees(MoneyMorning, Feb 1, 2012) - Chances are you've never considered timber stocks in your investing strategy.
But if that's the case, then you've been missing out.
Timber is a long-term investment that can reward your portfolio in good times, and protect it in bad.
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FRA welcomes Prediction of Timber demand increaseA recent report in the Financial Times has provided a boost for the forestry investment industry, as it outlines how timber demand could increase by 55 per cent by 2050, according to FRA.
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Timberland in Institutional Investment Portfolios: Can Significant Investment Reach Emerging Markets?A survey was carried out to improve the understanding of current investment patterns in forestry by investors and of the framework in which such investments are made.
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1.8 billion acres of timberland sold to TIMOThe world’s largest timber investment management organisation (TIMO), Hancock Timber Resources Group, and Molpus Woodland Group, have bought a 1.88 million acre plantation from Oregon’s Forest Capital Partners.
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New investors for Green Triangle’s 46,000-ha estateNew Forests announced that it has introduced new investors to make an investment in the Green Triangle Forest Trust. GTFT was established in March 2012 via the acquisition of the plantation assets of Auspine Ltd by New Forests Australia, New Zealand Forest Fund and a co-investor.
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South Australia - SA forests sold to The Campbell GroupThe South Australian state government has agreed to sell the South East timber harvesting rights to a consortium led by The Campbell Group (TCG) for an undisclosed amount. Backed by Australia’s Future Fund, the U.S.
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Investment guide to 'triple win' from locally controlled forestryA detailed discussion between investors and forest rights-holders, have resulted in new guidance for investments that can create a 'triple win' of returns for investors, livelihood security for local communities and protection for forests.
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What does the future hold for ethical investment?Ethical investment has hit the headlines recently as figures have suggested that there has been a slight drop in interest.
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UPM and Taaleritehdas Have Agreed to Trade 6,000 Acres of ForestryUPM and Taaleritehdas have agreed today 20.12.2012 around 6000 hectares of forestry trade. The farms are located in Central Finland in the following towns: Pyhäntä, Utajärvi, Kiuruvesi and Converter.
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Canadian pension fund buys into KaingaroaHarvard Management Company, which manages Harvard University’s US$30.7 billion endowment fund, has sold down its stake in the central North Island Kaingaroa forest in New Zealand.
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