The timberland investment conference 2023 is an important event for global investors and companies in the timberland investment industry. As one of the most profitable alternative investment options, timberland investment has seen growing interest in recent years. This conference will bring together major players to discuss latest trends, opportunities, and risks in global timberland markets.
With increasing focus on sustainable investing, timberland assets stand out for their dual advantage of stable returns as well as environmental benefits. However, there are also risks like wildfires, regulations, and alternative construction materials that need careful evaluation. The 2023 timberland conference will enable investors to gain unique perspectives on how to tap into this $240 billion global industry.
Surging Interest in Timberland Investment Globally
Timberland investment has surged in popularity over the past decade as investors seek out real assets for portfolio diversification and inflation hedging. Total global timberland assets under management doubled from $90 billion in 2011 to over $240 billion in 2021. North America accounts for the largest share, but new capital is increasingly targeting Australia, New Zealand, Latin America and Europe as well. Forestry corporations and pension funds have traditionally been the largest timberland owners, but private capital flows from family offices, foundations, and investment firms are rising sharply.
Key Factors Driving Returns in Timberland Investment
Timberland generates stable cash flows from the harvest and sale of trees for lumber production. Depending on the species and geography, harvest cycles range from as low as 15 years for pulpwood to over 50 years for premium sawtimbers. Trees continue growing in value year after year, making timberland an effective hedge against inflation over the long term. At the same time, land prices benefit from increasing scarcity of arable land globally. While timber prices are cyclical, the combination of biological growth and land appreciation has resulted in consistent total returns of 8-12% historically – higher than most conventional assets.
Risk Management Strategies for Timberland Investors
Wildfires, droughts, regulations, and trends towards alternative green building materials are key risks facing timberland investors. Over the past decades, wildfires have become more intense with changing climate patterns, devastating timber stocks and land value in impacted regions. Droughts and disease outbreaks also reduce biological growth. Further, additional government restrictions regarding logging and land use changes can hamper harvest plans. And emerging alternatives like mass timber may erode demand for traditional lumber over time. Savvy timberland investors are increasingly focused on geographic diversification across North and South America, Australia, and New Zealand to mitigate climate risk. Only circuits with strong legal protections and favorable demand/supply dynamics are seeing investment activity.
Outlook for Timberland Investment Returns 2023 Onwards
The timberland investment conference 2023 will offer rich perspectives into market outlook for the coming years. Lumber prices are expected to remain strong in early 2023 due to lagging supply, before stabilizing at lower levels as forestry inventories recover. Log prices in Europe are similarly forecasted to fall after a three-year high. However, timberland values continue rising across most geographies given bullish sentiment around land assets, scarcity, and biological growth. Intensifying climate change impacts remain the biggest long-term wildcard. Investors focused on acquiring and operating productive timberlands around the globe are poised to reap excellent risk-adjusted returns from this renewable real asset class.
In summary, the 2023 global timberland investment conference will enable major institutional investors, asset managers, industry experts, and corporations to share insights on the latest trends as well as risks impacting this $240 billion alternative investment sector. From surging capital flows to changing climate patterns, participants stand to gain unique perspectives on tapping into timberland’s enduring value proposition over the coming decade.