Investing in forest is a good idea if you want a good and safe investment, a sustainable portfolio and want to make a difference.
Investing in forests in the Baltics is a good idea, because here there are forests with high biodiversity, the risk is low, there is control over property rights and the trees grow regardless of cyclical fluctuations. At the same time, the prices of the Baltic forests are still competitive.
Scots pine and red spruce are the two tree species that are the dominant in the region.
Forest investment is characterized by a limited risk, with good opportunities for a reasonable return. The average growth of wood is approx. 3% p.a. and one can therefore count on a stable operating income.
There are good opportunities to optimize when to harvest the tree. You can harvest now, if you wish, save the growth for a later harvest or accumulate the growth of the forest and thus create added value in the forest company. Among other things, it provides good opportunities for optimization in relation to tax.
One can expect an economic gain over time. Over the past many years, forest prices have been rising, and over the past 2-3 years the increase has been marked. In practice, the market value of the forest is determined by supply / demand in the local area where the properties are located, the quality of the wood and by how much has been harvested over time.
Wood is a sustainable resource.
When you invest in forests, you help to reduce CO2 in the atmosphere, as the trees absorb and bind CO2 until it decomposes. An average Dane emits 6-10 tonnes of CO2 per year. 1-2 ha of forest is enough to bind this amount of CO2.
Wood is a sought-after resource.
You make money with a forest investment because trees are used for the production of timber, which is further processed into e.g. the furniture industry. The wood that is not suitable for timber production is typically cut into wood chips and used for heating and electricity production.
The forests of the Baltics.
The return of property to the original owners, after the restoration of the three Baltic nations in the 90s, has resulted in the average property size being small. It is considered by some investors as a disadvantage, while others see it as an advantage because its negotiability is better. The number of potential buyers is greater because the buyer's capital does not have to be so large with each transaction. (It works a bit like a joint-stock company splitting its shares to increase marketability.)
The real estate market.
There is a well-functioning, open and lively real estate market, and the smaller properties are quickly tradable. It creates flexibility and liquidity in the investment. The properties are spread over larger geographical areas, which is why a storm, pest infestation or other diseases will have a limited impact on the individual investment. The spread also allows the investor to take advantage of local differences in the sales of wood products.
Hunting in the Baltic forests.
There are good hunting opportunities in the Baltics, but the hunting rules are complicated and you typically have to be a member of a local hunting association to go hunting. Jesper Kjær ApS does not advise on specific hunting opportunities, but is of course helpful with information channels if desired.
Acquisition of forest in the Baltics.
Many forests are already privately owned in the Baltics. They are matriculated and ownership etc. is registered in official land registers. Foreigners have access to invest in forests in the Baltics. This is typically done through a local company (corresponding to a Ltd.) that is set up for the purpose.
Mediation of forests.
Jesper Kjær ApS has brokered agriculture in Poland and the three Baltic countries since 2003 and has over the years developed a large and efficient network. We have direct contact with many forest owners who want, or are considering, selling forest plots. We offer our knowledge, experience and network for the mediation of forests in the Baltics, directly from owner to investor. We can always offer to mediate both smaller plots or a large number of hectares of forest in the Baltics.