Irish chip in to keep forests in the family
Irish investors are following their European counterparts whose 'old money' wealth was generated by forestry assets in the family.
Interest in buying forestry plots as a long-term family asset is growing, according to Trevor McHugh of IFS Asset Managers, with forestry buyers keen to provide an income stream for both themselves and the next generation.
Around 5,000ac of forestry land is sold in Ireland annually, with prices ranging from €2,500/ac to more than €5,000/ac depending on the individual plot.
Buyers of forestry through IFS Asset Managers can be broadly broken into two types. The first cohort is buyers who want to buy mid- to late-rotation forests in order to cash in on the timber sales and who will either re-plant the land for themselves or for resale.
The second group of buyers are those who take a much longer-term view of the purchase, according to Mr McHugh.
"They want what we call multi-generational investments," he explained.
"They want the purchase to benefit themselves, maybe in the form of a pension pot at harvesting, but also to benefit the future generations of their family," he added.
"It's commonplace in Europe that a proportion of a family's wealth would be related to forestry. I spoke to one European customer whose family originally bought a forest in the 1800s and it was the only part of the family business that was still in place 200 years later," he said.