8
UK FORESTRY
Performance in the UK forestry sector
has been particularly strong with the
Investment Property Databank (IPD) UK
Forestry Index showing an annualised
total return of 17.7% over the past five
years and 16.3% over the past decade.
The annualised return for the 20 years
to December 2012 was 8.1%. Three-year
annualised returns rose to 23.9% in 2012,
outperforming bonds by 14%, equities by
6.7% and commercial property by 8.7%.
The IPD Forestry Index is calculated from
a sample of private sector coniferous
plantations of predominantly Sitka spruce
in mainland Britain. By the end of 2012, the
148 forest holdings in the index had a total
capital value of £220.7m.
In the 12 months to September 2013 the
FIM Timber Index increased by 3.6%,
driven by sawlog prices, which saw a 10.1%
increase in the same period. The Index
is now only 2.7% below the last peak in
September 2011.
The FIM Timber Index uses statistics
published by the Forestry Commission
(FC). It comprises an equal weighting of
the Coniferous Standing Sales Price Index
(CSSPI), being the average price of standing
conifer timber sales, and the Softwood
Sawlog Price Index (SSPI), being the
average price of all softwood sawlogs sold
on the FC estate.
UK COMMERCIAL FORESTRY TRANSACTIONS
(1998 - 2013)
Source: Savills
FIM TIMBER INDEX
Source: FIM Services Limited, Forestry Commission (FC), Office for National Statistics (ONS)
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
20
40
60
80
100
120
(1985 - 2013)
NCRIEF TIMBERLAND INDEX VS. S&P 500
(1993 - 2013)
Source: NCREIF
—
100
200
300
400
500
1993
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
NCREIF Timberland
S&P 500
FORESTRY
ANNUALISED
RETURNS:
PAST
5 YEARS
17.7%
PAST
10 YEARS
16.3%
PAST
20 YEARS
8.1%
£ Million
