High Returns on Forestry Investment

11/05/2010

 

High Returns on Forestry Investment
Sustainable Investment Opportunities
Investment in socially responsible products is increasing as climate change concerns grow, together with the ongoing and growing market for forestry products. Portfolio diversification is of interest to many and forestry investment offers stable long-term returns as well as increasing one’s green credentials.
 
Global demand for hardwood has multiplied 25 times in the last 40 years, and this trend is set to continue. With concerns over global warming and deforestation, there is now a global crackdown on illegal logging and deforestation. Supply is being restricted and this, together with environmental concerns, will likely drive legal timber prices higher in the years to come. Given the recent volatility in global stock markets, investors are looking towards stable commodities. Tropical forestry offers the ideal diversification for your portfolio, providing a stable market with high long-term returns on investment, and a low risk-to-return ratio.
It isn’t all hardwood. For example, Bamboo investment combines the environmentally conscious aspect of sustainable forestry investment with the extra benefit of delivering annual returns within just a few years. Unlike traditional hardwood forestry, bamboo is the fastest growing land-based plant on the planet and so can be commercially harvested from year 4. Being such a fast-growing plant, commercial harvests then occur each year delivering investors annual returns, perfect for regular income.
For the perfect balance to more volatile stock and real estate portfolios, Emerging Real Estate are pleased to present our clients with 3 original, long-term and stable, alternative investment options.
Bamboo
·         Invest from as little as US$5,500
·         Up to 19% discount when purchasing larger volumes
·         No ongoing management or maintenance costs
·         Returns produced from first harvest in Year 4
·         Annual harvests then produce annual income for owner
·         Minimum growth volumes guaranteed by developer
·         Returns increase from 8% pa in Year 4 up to 30% pa by Year 8
·         15 yr investment life
·         Large plantation company with hundreds of employees in 9 countries
Teak Trees
·         £15,000 for 50 mature teak trees
·         An established plantation of 12 yr old teak
·         Avoid the "bedding in" risk associated with any timber seedlings
·         Acquire timber during highest value growth curve (producing weather-resistant oils)
·         Shorter investment period, harvest in just 7 years
·         Avoid typical hardwood investment period ~ 20 years
·         Lump sum investment with lump sum return upon harvest
·         Final harvest completely at owner’s discretion
·         Land and timber are owned under separate notarized contracts
·         Separate management agreement ensuring owner authority and control
·         Established plantation manager with over 20 years experience
·         Approved for investment via UK SIPP pension vehicles
·         Forecast net return £73,260 after 7 years (IRR 22%)
Sustainable Agriculture
·         Purchase 5 acres of prime agricultural land for £20,000
·         Land ownership securely notarised by Government
·         Government-approved 30 yr leaseback contract with farming company
·         Leaseback contract gives fixed annual returns from Year 1
·         Year 1 contracted rental return 10% pa increasing to 15% pa by Year 6
·         Rental income then fixed at 15% per annum for 30 years
·         Regular annual income
·         Land owner takes advantage of long term rising value of agricultural land
·         Government approved established farming company
·         Avoid capital gains tax by choosing 99 yr leasehold over freehold
·         Approved for investment via UK SIPP pension vehicles
Further detail can be found on our website - http://www.emergingrealestate.com/content/sustainable-investments

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