german forestry investments
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German Forestry Investments provide Capital Growth, give Tax Incentives, freehold title to the land in GermanyTRANSCRIPT
Promoted by Robin ia Invest
EUROPEANFORESTRY
Content
2 3
12-year Paulownia plantation
PageIntroduction to German plantation forestry 5
Why invest in forestry? 6 - 7
Sources of return 9
Risk factors 11
Why invest in German plantation forestry? 13
The differences between plantation forestry and conventional forestry 15
Investment options 16 - 17
Tax incentives for UK clients 19
Robinia, the alternative to tropical hardwoods. 20
Paulownia, the aluminium of the timbers. 21
The Robinia timber market in Europe 23
The Paulownia timber market 24- 25
Plantation forestry: how does it work? 27
Establishing plantations in Germany 28
Managing plantations: what does this involve? 29
Harvesting and selling the timber 30
Paulownia International 32
Price development of German farmland 34
Frequently asked questions 35 - 46
Appendices
Robinia investment options 1
Paulownia investment options 2
Return calculations for Robinia investments 3
Return calculations for Paulownia investments 4
4
obinia Invest GmbH is a German company, founded in January 2007,
which specializes in establishing Robinia and Paulownia hardwood plantations
in Germany.
We offer plantation forestry plots as long-term direct investments to private
clients. We work together with specialist forestry experts, tree nurseries and
bio-engineers in establishing the plantations and three different management
companies to manage them.
Robinia and Paulownia trees grow fast: their timber is valuable and can be
commercially harvested after only 10-12 years, though longer rotations will
increase capital growth greatly.
Our clients tend to be well informed or sophisticated investors from Europe,
the Middle East and Asia.
We offer the option to purchase the leasehold or freehold title (ownership) of
plantation plots and the trees planted on them. Owning the land on which the
trees are planted offers numerous advantages to the investor, such as security
and the option to make consecutive rotations at reduced cost.
The latter is made possible as the harvested trees will simply regrow from the
cut stumps.
The purpose of this corporate brochure is to provide investors with
an understanding of our business model and how our company and
investments are structured with risk, security and capital growth in
mind. Should you require more indepth information, please request our Robinia
or Paulownia investment brochure.
The investment brochures will go into greater detail with regard to the
calculation of returns, risks involved and technical data concerning Robinia and
Paulownia timber.
Wouter Bakker
Managing Director
Introduction to German Plantation Forestry
5
R
6
Why Invest in Forestry?
nvesting in forestry offers a number of benefits to an investor’s
portfolio:
P diversification: an investment in forestry helps create a more
efficient portfolio as it provides an excellent complement to
the traditional asset classes of equity and fixed income
P reduced volatility: in relation to forestry’s rate of return, the
volatility is low. This is due to the biological growth of the tree.
When forestry is combined into a diversified portfolio, returns
tend to smooth over time, thereby reducing the overall
portfolio’s risk level
P low to negative correlation with other asset classes.
P forestry correlates highly with inflation and is therefore a
very effective investment for preserving capital
7
I
8 9
Sources of Forestry Returns
n order to understand a forestry investment, it is important to
understand the fundamental factors that drive returns. The following three
factors determine forestry returns:
Biological tree growth:
Timber is a renewable resource which will increase in value as it matures.
This non-financial source of return is unique to the timber asset class as
growth occurs regardless of macro-economic conditions or financial market
performance. Not many other assets or investments can make the same claim.
Timber price change:
This is caused by population growth and the overall level of economic activity.
Historically timber prices have always gone up over a longer period of time.1
Land value:
The value of the land represents only a small percentage of the
projected returns. Its percentage is larger with shorter rotations
but lowers with longer rotations. Owning the land will be more
important as a security than as a means to increase capital growth.
Sources of return
Biological growth 50%
Land prices 11%
Price increases 39%
I
1 Source: Timber Index
10 11
Risk Factors
espite the favourable return and diversification benefits of forestry, there
are still risks to consider:
Economic factor:
If timber prices are low, harvesting should be delayed until those prices have
recovered
Natural risks:
Fire, weather, wildlife and insects can have a negative impact on forestry
returns if the trees are not properly managed. Due to the intensive management
of plantation forestry, these risks are lowered considerably.
There are almost no forest fires or large storms in Germany and,
if storms occur, it is only in winter, and most damage is done to evergreen
trees as they do not shed their leaves. Nevertheless, the management company
will insure your forestry plot against fire and storm damage with AXA AG.
Hardwood trees are very resistant to insects and therefore hardly
ever suffer from insect damage. A fence is built around the plantations to
protect the trees against other wildlife.
Lack of liquidity:
Forestry is a relatively illiquid investment and is therefore not suited for those
investors seeking a quick return. It is suited for investors seeking all the
benefits that forestry does have to offer, as stipulated on page 5.
D
“The best time to plant a tree was 20 years ago, the second best time is now” – Chinese proverb
12
esides the benefits of investing in conventional forestry, plantation forestry in Germany has a few unique
characteristics that make it a very attractive option for UK investors:
P Plantation forestry is by definition sustainable.
P Germany offers our clients a stable economic and political location for their investments.
P Plantation forestry based in Germany offers UK clients several tax incentives.
P The option to purchase the freehold title to the land increases security and the opportunity to
benefit from ever increasing farmland prices in Germany.
P Consecutive rotations at reduced cost are another option, as the cut trees regrow from the stumps.
13
Why Invest in German Plantation Forestry?
B
14
orestry investments can be made into hardwoods and softwoods.
Hardwoods are trees that lose their leaves in the autumn and tend to cater to
higher niche markets, such as flooring, furniture or polewood (in the case of
Robinia).
Most plantation forestry is focused on hardwoods.
Softwoods are evergreens; most forestry owners focus on these.
The end use of softwoods is usually structural timber.
To get an overview of the differences between these two types of forestry we
have listed the key features of them below:
The Differences between Plantation Forestry and Conventional Forestry
15
F
Plantation forestry Conventional forestry
Tree species: Robinia & Paulownia Pine & Spruce
Timber: Hardwood Softwood
Timber prices: High Low
Timber volume: High in 15-20 years High in 60+ years
Management: Intensive Low
Harvests allowed: No limit Limited
Plot size: Can be relatively small Must be large
Land: Farmland Forest
here are three main factors that determine the size of your initial investment
and the return on your investment later on:
You have the choice between purchasing Robinia or Paulownia trees. To
assist you in making an informed decision, we have listed the key features for
both species:
Investment term/rotation: This can be a minimum of 10 years for Robinia
or 12 years for Paulownia. Longer rotations of 15-20 years will increase capital
growth greatly as the timber volume and value of older trees is higher. The
longer the investment term, the more money is needed for managing the trees.
16
Investment Options
You have the option between a freehold or leasehold agreement. Freehold
plots are available from sizes of 2,500 m2 (1.2 acres). Leasehold investments
can be made from plot sizes of 1,000 m2 (0.6 acres).
3T
1
2
17
he investment sum is comprised of the purchase price for the land, plantation
establishment and management fees.
Robinia Invest establishes the plantations while a management company looks
after the trees. We can recommend three management companies to you, but
you also have the option of managing your trees by yourself.
Investment tables for a 15-year Robinia and a 15-year Paulownia rotation are
listed under the appendices and serve as an example of what Returns On
Investment (ROI) can be achieved.
We have used the lowest management fees on offer to calculate the investment
sum.
Private placements are possible from plot sizes of three hectares and will yield
a higher ROI, as the price per hectare will be lower.
More indepth information is available in our investment brochure, which we
will gladly send you upon request.
The investment amount contains all the costs that are associated with the
purchase of the land, the establishment of the plantation and the management
of the plantation.
T
Robinia Knife Block
Robinia-Grain
key features Robinia Paulownia
European timber market: High demand Low demand
Global timber market: Low demand High demand
Growth rate: Fast Very fast
Fertilizer needed: Little Much
Irrigation needed: Little Much
Pruning needed: Intensive Intensive
Timber value of older trees: High Very high
Timber volume of older trees: Average Very high
Minimum rotation needed: 10 years 12 years
Planted trees per hectare: 4,500 600
18
nder current UK law there are a number of favourable tax incentives that
apply to the direct ownership of commercial forestry (or woodlands) located
in the European Economic Area:
P no income tax
P no capital gains tax on timber
P no inheritance tax after two years
Commercial forestry is defined as a property where the trees are managed
and the harvested timber is actively marketed and sold. Please request the
free tax report on commercial forestry in the EEA for all the details. The report
was drawn up by UK-based EQ accountants specializing in forestry.
As a special service to Robinia Invest, EQ will answer any basic questions our
clients have with regard to forestry and taxes, free of charge.
Should you have any questions that require more investigation, normal hourly
rates will apply.
Tax Incentives for UK Clients
19
U
Robinia, the Alternative to Tropical Hardwoods
obinia is a fast-growing hardwood tree that is in demand as a viable
alternative to teak. As it is such a durable hardwood, more and more
applications are being found for Robinia, boosting demand and increasing
prices.
Robinia is suited to areas with a temperate and dry climate with soil that is
sufficiently loose (the sandy/loamy soil such as is found in Eastern Germany
is ideal).
The trees grow fast: about 1m in height and 1cm in diameter per year.
The specific weight is quite high at an average of 750 kg/m3.
Freshly-logged Robinia weighs 900-1200 kg/m3. This is one of the reasons why
Robinia can be offered as a Class 1-2 durability timber.
R
Properties
very durable, even in water high resistance to abrasion replaces tropical timbers (teak, mahogany and bongossi)
natural resistance to wood-destroying fungi and insects very durable to weather influences good processibility
high percentage of heart wood no impregnation necessary late burning point
low shrinkage valuevery high resistance to wear (parquet) high dynamic strain properties (e.g. Axe handles)
very hard and heavy
Paulownia, the Aluminium of the Timbers
he Paulownia is one of the fastest growing species of trees in the world.
The tree, also known in Japan as a ‘Kiri’, grows up to 2m in height and 3 cm
in diameter per year under German weather conditions. In Bulgaria they grow
even faster. At 300 kg/m³, the specific weight of the Paulownia is relatively
light for a hardwood – the property that makes it so sought after for a range of
specific applications.
Our Paulownias can withstand temperatures of up to -25°C without any problem.
Unlike poplars and willows, Paulownias produce very thick storage roots
during their first year, making them insensitive to long periods of drought.
They are not fussy about soil type and therefore also suitable for cultivation on
marginal sites (sandy and scree soil). In addition, thanks to its fast growth, the
tree binds any quantities of the ‘climate-killer’, carbon dioxide – about 30 tons
per plantation hectare and year. This corresponds approximately to the annual
CO2 production of a family of four.
T
Properties
Very easily processed hardwood No resin or smell Insulated against low temperatures
Low silicone content Dries very quickly in the air - in approx. 30 dayscomparably sturdy, despite high growth rate
Very resistant to decay Low weight 300 kg/m3 (oak 670 kg/m3)
Animal wood pests are not known Low crude ash and chlorine content use in the luxury segment of the wood processing (furniture, musical instruments, windows, doors, yachts, surfboards, aircraft, etc.)Fire-retardant effect – burning point 400°c Very good bio-energetic usability
20 21
22
The Robinia Timber Market in Europe
large market for Robinia timber products has been established
in Western Europe, so we expect all of the harvested Robinia timber to be sold
in Europe. Logs and polewood (such as fenceposts) comprise the biggest share
of the Robinia timber market. Robinia logs must have a minimum diameter of
6-8 cm and a length of 1.25 meters to be commercially viable.
The value of Robinia timber greatly increases with diameter and length of the
logs, which is why older Robinia trees are more valuable than younger Robinia
trees. Longer rotations will therefore have a higher return on investment than
shorter rotations.
2 Sources: German Timber Company
23
A
Overview of current prices
Diameter Length Age of tree Price2
10 cm 2 meters 10 years € 25 retail
12 cm 3 meters 15 years € 58 retail
16 cm 4 meters 20 years € 141 retail
Robinia poles
24
esides the laws of supply and demand, there is also a grading system
that determines the value of Paulownia timber:
Grade A wood must be free of defects;
Grade B wood may have 1 defect;
Grade C and D wood may have 2 defects;
Grade E wood has 3 or more defects.
Timber FOB China may range from € 190 (Grade E) to € 515 (Grade A) per m3
(2010 prices).
B
25
The Paulownia Timber Market
ust like Robinia timber, the value of Paulownia timber increases with its
volume and length. Currently, most of the Paulownia timber is sold in Asia,
with Japan being the biggest importer. We expect the European timber market
to open up to Paulownia timber as soon as a steady supply can be guaranteed.
Paulownia plantations are currently set up all over Europe and this will
guarantee this much-needed supply in 10-15 years’ time. We therefore expect a
good market for Paulownia timber in Europe after the first successful harvests.
Current prices for Paulownia boards are as follows:
In our projected return calculations for Paulownia timber, a current price of
€ 312/m3 was used for 12 to 15-year-old timber and € 500/m3 for 20-year-old
timber.
China : € 250 - € 738/m3
UK : € 278 - € 345/m3
USA : € 686 - € 3659/m3
Australia: € 567 - € 1558/m3
J
3-years-old Paulownia trees
Small end Growth rings per inch
Diameter (inches) 8 6 4 4 < 4
20 + A1 B1 C1 D E
16 - 19 A2 B2 C2 D E
12 - 15 A3 B3 C3 D E
8 - 11 A4 B3 C4 D E
26
Plantation Forestry: How Does it Work?
here are many different aspects involved with plantation forestry, so we
have displayed the development process of the trees on this page. From the in
vitro process in the laboratory, the planting on the plantation, the management
of the trees, the growth of the trees until the harvesting and transport of the
timber to the marketplace. More elaborate information can be found in the next
three chapters.
T
2712-years-old Paulownia trees
28 29
Establishing Plantations in Germany
he establishment of a plantation starts by finding the right farmland:
this is used as there are no limits on how much timber can be harvested from
it at any given time.
Robinia and Paulownia trees require a soil that drains any excess water easily,
so a sandy soil is preferred. Quality of the soil is also important as poorer soils
will need more fertilizer and irrigation.
After the land has been purchased, the soil must be loosened by ploughing and
harrowing before the trees are planted. This will enable the roots of the young
trees to grow faster, thereby increasing the growth rate of the trees.
To increase their survival and growth rate, Robinia and Paulownia trees
are planted as one-year-old rootstocks. Rootstocks are grown under stable
conditions in a nursery for one year and then planted on the plantations.
We plant 4,500 Robinia or 600 Paulownia trees per hectare.
This planting density optimizes growth for both species. After all the trees
have been planted, a fence is built around the plantation to keep out local
wildlife.
T
Maintenance of plantation
The Paulownia-seedlings
The prepared planting holes
The planting of Paulownia seedlings
29
Managing Plantations: What Does this Involve?
fter the plantations have been
established, the trees need regular
management to optimize their growth
and value. This work is done by one
of the recommended management
companies, or the investors can do it
themselves. The following is required to
optimize the development of the trees:
A soil analysis is made to see what kind of nutrients are available for the trees
and to determine what kind of fertilizer and how much is required.
Robinia trees create their own nitrogen from the air. This is a unique
characteristic and makes the trees less dependent on fertilizer.
Paulownia trees require fertilizer during the first few years. Some herbicides
will be used to create a weed-free zone directly around the trees. Most other
weeding is done mechanically and manually. Intensive weeding is needed
during the first few years after planting.
Pruning will have to be done regularly to encourage straight growth and create
quality timber. Large side branches have to be removed every year for the first
few years.
Coppicing of Paulownia: Paulownia trees need to grow at least two meters in
the first year to create valuable timber later on.
If the trees have not reached two meters at the end of the first year, they are
cut back to five centimeters. This will encourage faster growth in year two due
to the well-established root system.
In Germany, it rains throughout the year, but there are spells of drought in the
spring and summer. During these times, it is important to irrigate the trees.
The fence around the plantation will need repairing from time to time.
This has to be done occasionally after a fence gets damaged from the fall of
overhanging branches or when an animal tunnels underneath it.
30
3-years-old Robinia Plantation
A
Harvesting and Selling the Timber
n order to make plantation forestry a profitable investment, the trees need to
grow to a certain size before they can be harvested.
A 20-year-old tree will be more valuable than a 15-year-old tree as it has a
greater volume. Processing more mature timber creates less waste; therefore
there is more useable and valuable timber.
Our clients are free to harvest their trees whenever they wish, but the
longer the rotation, the higher the return on investment will be.
After consulting with the investor, the chosen management company can advise
when the trees should be harvested.
Depending on plot size and number of trees, harvesting can be done
manually with a chainsaw or with a harvester machine. Harvesting
manually will be more cost effective when dealing with smaller plots,
whereas larger plots will be harvested using a harvester machine.
Harvesting manually currently costs about € 20/hour while the harvester
costs € 9/m3 or € 270/hour (incl. de-branching and forwarding the timber).
After the trees have been felled, they are de-branched and sawn into
manageable pieces, which are then piled up on the edge of the plot.
The harvested timber can be insured against theft at all stages up to the
point of sale to an end user.
The harvested timber must then be allowed to dry, after which it can either be
transported to a local sawmill or a mobile sawmill can saw the timber on site.
The cost of sawing the logs into useable boards or poles is currently € 54/m3.
The finished timber products will then be transported to a local warehouse
until the timber is sold.
I
Harvesting Transport
31 32
aulownia International is a consultancy for the production,
supply and husbandry on all types of very fast growing trees.
In the establishment of our Paulownia plantations we have
regularly asked Nigel Young from Paulownia International for
advice. He is an expert on the establishment and management
of Paulownia plantations and his advice has been very valuable.
He has calculated the yields for the Paulownia plots and has
given the management companies some advice on how to
manage the Paulownia plots more effectively.
P
Letter from Paulownia International
Source: Statistisches Bundesamt
33 34
< 8,000
8,000 - 16,000
16,000 - 24,000
> 24,000
Saxony
Brandenburg
Bavaria
Baden-Württemberg
Hesse
Thuringia
Rhineland-Palatinate
Saarland
Saxony-Anhalt
North Rhine-Westphalia
Lower Saxony
Schleswig-Holstein
Mecklenburg-Western Pomerania
+56%
+160%+90%
+52%
+90% +203%
+140%+172%
+25%+21%
+36%+39%+10%
+5%
0%-8%
+25%+10%
-7%+9%
+68%+88%+57%
+50%
+133%+117%
Farmland €/ha*
*(includes meadows)
Germany: 14,424 €/ha
Development from: 2007-2012 +57%
2003-2012 +57%
Price Development of German Farmland
Frequently asked questions
1. How does my forestry investment work?
Your freehold forestry plot consists of three assets in one: timber, biomass and
land. As the trees mature, their timber volume increases and becomes more
valuable. After a rotation of 10-20 years, the trees are harvested, the timber
process and sold.
2. Isn’t my term rather short for a forestry asset?
How does this work?
The usual rotation for forestry investments is 20 to 25 years. Our Robinia
and Paulownia investment have a maximum investment term of 20 years. With
Paulownia trees, commercial harvests for timber can be made after 12 years.
Robinia trees can even be harvested after 10 years. We do advise anyone who
is seeking the highest return on his investment possible to choose a longer
investment term. We would advise a 15-20-investment term to make the highest
profit on your forestry investment.
3. 3. What happens when the trees need to be harvested?
Your chosen management company can harvest the trees and then sell them on
your behalf, whenever you wish. They will advise you when best to harvest your
trees. If you have the freehold title you can then sell your land or make another
(much cheaper) rotation.
4. What happens if I need to sell within 10, 12, 15 or 20 years?
Should you need to sell prior to the end of your recommended rotation, you
have three options available to you (although, to maximise your returns we
recommend that this is not done unless absolutely necessary).
1. You are free to sell your trees to a third party of your choice.
We will be happy to help you with this, should you wish.
2. Upon your instruction, we will be more than happy to offer
your trees to our other clients.
3. We may be interested in buying your trees back from you.
The price of your trees can be negotiated between all parties involved at the
time you wish to sell.
5. Can I visit the plantations?
Yes! You are welcome to visit the plantations at anytime. We would be more
than pleased to help you with tips and directions for your journey.
6. I really don’t know anything about Robinia or Paulownia?
You do not need to know a lot about Robinia or Paulownia to make this a
profitable investment for you. Your management company of choice will have
all the necessary knowledge and experience to ensure a good development of
your timber.
7. Does my Robinia or Paulownia bind a lot of CO2?
Yes it does! A hectare with Robinia timber binds (on average) 15 tons of CO per
year. A hectare with Paulownia binds about 100 tons of CO2 per year, another
benefit of your investment. A typical household emits 9 tons of CO2 per year. So
if you buy Robinia or Paulownia timber, you more than compensate for your own
CO2 emissions.
35 36
The Current Yield Calculationsand the projected returns.
1
*Based on 4% p.a., price increase for timber and land, with the exception of the 10- year rotation where we have calculated at 6% p.a.
Robinia Investment Options
10
15
20
Investment Options ˙ 10-year Robinia
Investment Plot size Agreement type Projected Return ROI
£ 4,200 1,000 m2 Leasehold £ 7,400 76%
£ 13,000 2,500 m2 Freehold £ 24,250 87%
£ 25,500 5,000 m2 Freehold £ 48,500 90%
£ 50,000 10,000 m2 Freehold £ 97,000 94%
£ 96,000 20,000 m2 Freehold £ 194,000 102%
Investment Options ˙ 15-year Robinia
Investment Plot size Agreement type Projected Return ROI
£ 4.400 1,000 m2 Leasehold £ 14,100 220%
£ 13.500 2,500 m2 Freehold £ 43,000 219%
£ 26.500 5,000 m2 Freehold £ 86,000 225%
£ 52.000 10,000 m2 Freehold £ 172,000 231%
£ 100.000 20,000 m2 Freehold £ 344,000 244%
Investment Options ˙ 20-year Robinia
Investment Plot size Agreement type Projected Return ROI
£ 4,600 1,000 m2 Leasehold £ 27,800 504%
£ 14,000 2,500 m2 Freehold £ 80,000 471%
£ 27,500 5,000 m2 Freehold £ 160,000 482%
£ 54,000 10,000 m2 Freehold £ 320,000 493%
£ 104,000 20,000 m2 Freehold £ 640,000 515%
Paulownia Investment Options
2
*Based on 4% p. a., price increase for timber and land.
Investment Options ˙ 12-year Paulownia
Investment Plot size Agreement type Projected Return* ROI
£ 4750 1,000 m2 Leasehold £ 8,900 87%
£ 14,000 2,500 m2 Freehold £ 27,500 96%
£ 27,000 5,000 m2 Freehold £ 55,000 104%
£ 52,000 10,000 m2 Freehold £ 110,000 112%
£ 100,000 20,000 m2 Freehold £ 220,000 120%
Investment Options ˙ 15-year Paulownia
Investment Plot size Agreement type Projected Return* ROI
£ 5,250 1,000 m2 Leasehold £ 12,650 141%
£ 14,500 2,500 m2 Freehold £ 37,500 159%
£ 28,000 5,000 m2 Freehold £ 75,000 168%
£ 54,000 10,000 m2 Freehold £ 150,000 178%
£ 104,000 20,000 m2 Freehold £ 300,000 188%
Investment Options ˙ 20-year Paulownia
Investment Plot size Agreement type Projected Return* ROI
£ 5,750 1,000 m2 Leasehold £ 30,200 425%
£ 15,000 2,500 m2 Freehold £ 82,500 450%
£ 29,000 5,000 m2 Freehold £ 165,000 469%
£ 56,000 10,000 m2 Freehold £ 330,000 489%
£ 108,000 20,000 m2 Freehold £ 660,000 511%
12
15
20
Investment No Price increase0% p.a.
Low Price increase2% p.a.
Medium Price increase4% p.a.
High Price increase6% p.a.
1 ha (hectare) = 10,000 m² 1 ha 1 ha 1 ha 1 ha
Leasehold £39,000 £39,000 £39,000 £39,000
Freehold £52,000 £52,000 £52,000 £52,000
Thinning at year 10, harvesting 2,000 trees
Harvested usuable logs per Ha 2,000 2,000 2,000 2,000
Timber volume in m3 50 50 50 50
Price per log (D: 10 cm L: 2.0 m) 60% of retail price £ 13,60 £ 16,60 £ 20,10 £ 24,30
Yield logs £ 27,200 £ 33,200 £ 40,200 £ 48,600
Yield biomass £ 1,230 £ 1,500 £ 1,815 £ 2,205
Thinning yield at year 10 £ 28,430 £ 34,700 £ 42,015 £ 50,805
Harvesting costs ( £ 18 *200 hours) £ 3,600 £ 4,388 £ 5,328 £ 6,447
Processing costs (£ 49/m3) £ 2,450 £ 2,986 £ 3,627 £ 4,388
Timber yield thinning before sales £ 22,380 £ 27,326 £ 33,060 £ 39,970
Salescosts -5% £ 1,119 £ 1,366 £ 1,653 £ 1,999
Thinning yield at year 10 £ 21,261 £ 25,960 £ 31,407 £ 37,972
Harvest at year 15, harvesting 2,000 trees
Harvested usuable logs per Ha 1,800 1,800 1,800 1,800
Timber volume in m3 144 144 144 144
Price per log (D: 12-16 cm L: 3 m) 60% of retail price £ 31,4 £ 42,2 £ 56,5 £ 75,2
Yield logs £ 56,520 £ 75,960 £ 101,700 £ 135,360
Yield biomass £ 1,230 £ 1,650 £ 2,214 £ 2,948
Harvest yield at year 15 £ 57,750 £ 77,610 £ 103,914 £ 138,308
Harvesting costs (£ 18 *300 hours) £ 5,400 £ 7,268 £ 9,725 £ 12,941
Processing costs (£ 49/m3) £ 7,056 £ 9,496 £ 12,707 £ 16,910
Yield before sale of timber £ 45,294 £ 60,846 £ 81,482 £ 108,457
Salescosts -5% £ 2,265 £ 3,042 £ 4,074 £ 5,423
Yield at year 15 £ 43,029 £ 57,804 £ 77,408 £ 103,034
Yield at year 10 £ 21,261 £ 25,960 £ 31,407 £ 37,972
Total timber yield £ 64,290 £ 83,763 £ 108,815 £ 141,005
Sale of land £ 13,050 £ 17,564 £ 23,502 £ 31,275
Total yield with sale of land £ 77,340 £ 101,327 £ 132,317 £ 172,280
Return on Investment
Leasehold 65% 115% 179% 262%
Freehold 49% 95% 154% 231%
4
Investment No Price increase0% p.a.
Low Price increase2% p.a.
Medium Price increase4% p.a.
High Price increase6% p.a.
1 ha (hectare) = 10.000 m² 1 ha 1 ha 1 ha 1 ha
Leasehold £ 41,000 £ 41,000 £ 41,000 £ 41,000
Freehold investment £ 54,000 £ 54,000 £ 54,000 £ 54,000
At year 12, harvesting of 100 trees
Yield timber in m3 50 50 50 50
Price timber/m3 £ 280 £ 355 £ 448 £ 563
Yield timber £ 14,000 £ 17,750 £ 22,400 £ 28,150
Yield biomass in tons 10 10 10 10
Price biomasse/ ton £ 82 £ 104 £ 128 £ 165
Yield biomass £ 820 £ 1,040 £ 1,280 £ 1,650
Harvesting costs (£ 9/m3) £ 450 £ 571 £ 720 £ 905
Processing costs (£ 49/m3) £ 2,450 £ 3,107 £ 3,922 £ 4,930
Yield before sale of timber £ 11,920 £ 15,112 £ 19,038 £ 23,965
Salescosts -5% £ 596 £ 756 £ 952 £ 1,198
Yield at year 12 £11,324 £14,356 £18,086 £22,767
At year 15, harvesting of 400 trees
Yield timber in m3 280 280 280 280
Price timber/m3 £ 280 £ 377 £ 504 £ 671
Yield timber £ 78,400 £ 105,560 £ 141,120 £ 187,880
Yield biomass in tons 15 15 15 15
Price biomasse/ ton £ 82 £ 110 £ 148 £ 197
Yield biomass £ 1,230 £ 1,650 £ 2,220 £ 2,955
Harvesting costs (£ 9/m3) £ 2,520 £ 3,392 £ 4,538 £ 6,039
Processing costs (£ 49/m3) £ 13,720 £ 18,480 £ 24,640 £ 32,760
Yield before sale of timber £ 63,390 £ 85,338 £ 114,162 £ 152,036
Salescosts -5% £ 3,170 £ 4,267 £ 5,708 £ 7,602
Yield at year 15 £ 60,221 £ 81,071 £ 108,454 £ 144,434
Yield at year 12 £ 11,324 £ 14,356 £ 18,086 £ 22,767
Total timber yield £ 71,545 £ 95,428 £ 126,540 £ 167,201
Sale of land £ 13,050 £ 17,564 £ 23,502 £ 31,275
Total yield with sale of land £ 84,595 £ 112,992 £ 150,042 £ 198,476
Return on Investment
Freehold 57% 109% 178% 268%
Leasehold 74% 133% 209% 308%
Return Calculations for a 15-year Robinia Investment Return Calculations for a 15-year Paulownia Investment
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