Woodland Investment Features

Forestry is an investment opportunity that grows in physical volume as well as price point per unit as trees grow into valuable commercial timber for biomass, paper, furniture and construction. By definition, timber investments are long-term transactions with many species of commercial timber taking decades to reach maturity before harvest.

Forestry has been shown to be an effective hedge against inflation, delivering excellent risk-adjusted and tax efficient growth for Investors prepared to take a long-term view for a portion of their pension plans.

For further detail and a summary of the performance, and risks associated with timber investments, click here to download the The DGC Asset Management Woodland Investment Report.

1. Forestry acts as principal protection tool.

Real assets that hold their value in all investing environments are becoming expansively important for all types of Investors, from Pension Funds and Institutional Investment Funds to wealthy private individuals and family offices. Direct timber investments that involve ownership of the underlying properties provide shelter for capital during periods of volatility in traditional markets and high inflation. A number of independent studies have shown that cash held in woodland investments is unlikely to lose value, and is likely to fare better than inflation in the mid to long-term.

2. Timber investments are an excellent investment in times of high inflation

As revenues from timber investments are based upon the harvesting and sale of agricultural commodities, returns tend to keep pace with and exceed the rate of inflation as the price of agricultural commodities such as food, biomass and timber rise as consumption from a growing and richer world population continues to grow. The price of timber tends to rise in the mid to long term, compounding capital growth driven by the biological growth of tree.

Woodland investments have outperformed UK and US inflation since records began.

3. Forestry investments generate tax efficient income

Many investment assets regarded as a hedge against inflation such as precious metals do not generate income, only capital growth. Woodland investments on the other hand generate annual income from harvesting trees at various stages in the forest life-cycle, a process known as thinning during which weaker trees are harvested to create space for more valuable, larger trees to flourish. These less attractive trees also generate revenue, usually sold for paper production or wood fuel. This is especially attractive to Investors seeking to replace lost risk-free income during periods of poor returns on cash.

Depending on the property's location, timber income can be free of both income tax and capital gains tax, further enhancing returns especially for higher rate tax payers. Other income sources for forestry properties include the sale of sporting rights and potentially leasing part of the property to outdoor activity organisers and other sporting businesses.

For more information about current timber investments, click here to view DGC Asset Management Woodland Investment Opportunities.