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Investment Property Databank recommends investing in forestry
26/06/2009
According to statistics from the Investment Property Databank (IPD), returns on investment in forestry in 2008 totaled 7%, which means it outperformed commercial property and equities last year.
Bonds were the only asset class to outperform forestry funds last year, with a return of 15%, while commercial property had a poor year, delivering returns of -22.1% while equities performed even worse, returning -29.9% to investors.
The strong returns came despite the fact that timber prices fell by 28.5% globally over the same
period.
Woodland investment advisor, Simon Hart says, “the value of UK commercial forests held up and with very low leverage in the UK forestry market there was little evidence of distressed selling.”
“Investors are seeing trees and land as a safe haven and retained their belief in the long-term fundamentals of forestry investment, despite the sharp fall in UK timber prices,” added Hart.
On top of the returns, people who invest in forestry are not hit by the capital gains tax that other investors have to pay. Indeed the profits are also exempt from income and corporation tax. In addition, inheritance tax cannot be charged on forestry investments once they have been held for two years.
Bonds were the only asset class to outperform forestry funds last year, with a return of 15%, while commercial property had a poor year, delivering returns of -22.1% while equities performed even worse, returning -29.9% to investors.
The strong returns came despite the fact that timber prices fell by 28.5% globally over the same
period.
Woodland investment advisor, Simon Hart says, “the value of UK commercial forests held up and with very low leverage in the UK forestry market there was little evidence of distressed selling.”
“Investors are seeing trees and land as a safe haven and retained their belief in the long-term fundamentals of forestry investment, despite the sharp fall in UK timber prices,” added Hart.
On top of the returns, people who invest in forestry are not hit by the capital gains tax that other investors have to pay. Indeed the profits are also exempt from income and corporation tax. In addition, inheritance tax cannot be charged on forestry investments once they have been held for two years.
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