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Why buy Trees? Why buy Trees?

Forestry Investments

Does money really grow on trees?

No of course it doesn't. It grows in trees.
It's the wood that is valuable.


How do I make money from trees?

You lease your forestry investment plot, and when the trees mature in as little as four to six years, you and your appointed forestry managers harvest and sell your timber and you receive 100% of the net profit generated.


Isn't that a long time to have to wait for a return?

With most high value assets, you are usually advised to take a medium to long term view. If it's a financial product, that's normally between five and ten years, so waiting four to six years for your agarwood to mature is quite in line with other types of high value assets. Or you could lease a plot for your children, and when they reach their twenty first birthday they can reap the rewards of their holdings in teak!

Short or long term, you - and they - are the winner.


How are Harvest Maturities Projected?

We try to project harvest maturities realistically.

This means we look at today's average harvest values for each type of wood. We then look retrospectively at the respective annual increases during the last ten years and use these as a guide when projecting potential future maturities - as it is often said that in predicting the future it is helpful to study the past!

That said, past growth rates are by no means a guarantee of those in the future - they are however the only "yardstick" one has in looking forward and should therefore be viewed realistically. The positive viewpoint here is that the forestry investments market values have consistently risen over the years and one would hope this trend would continue!


Why trees are such a good buy

The simple chart below shows you why...

47 years of Annual Timberland Return (%) graph

In recent decades, timber has been one of the best assets to own.
Consider the graph below...

Annualized Timber Returns graph

The graph on the left is based upon North American and European softwoods which have a significantly reduced market price compared to their tropical hardwood counterparts, therefore producing significantly lower yields.

It is encouraging to see that even these lower value woods show an average compound return in excess of 16%.

With agarwood the market price of the wood is largely immaterial as we harvest to produce the highly sought "Oud".




 
 
Forestry Investments