Returns from forests outstripped all other sectors of the property market in 2008, according to new IPD data.
Across the financial sector, only bonds beat the 7% total returns provided by forest assets. While this represents a fall from the 2007 high of 32% -caused bya dropin timber prices -the sector is expected to remain resilient in 2009.
Simon Hart, a woodland investment adviser at UPM Tilhill, a sponsor of the IPD UK Forestry Index, said: “The volatility in the timber market has not been reflected in freehold commercial forest values. In most situations,when forests come to the market, felling can be delayed for five or more years.
“Investors are taking a long-term view, and demand for forest property has notreflected the fall seen in the timber market,” he added.
“With uncertainty over the impact of quantitative easing on inflation and the value of paper money, investors are moving into tangible assets, such as land, timber and gold.
“There is much more caution in the market in 2009but, providing there are no further significant falls in timber price, investor confidence should remain intact.”
