Featured Green Belt Services 
New Home and International Timberland Investment report by John O’Reilly (Chief Executive, Green Belt Ltd)
With a global credit crunch in full swing, and investors lamenting the poor performance of equities, commercial property and bonds, now is the perfect time to invest in timber. As an asset class in the commodity sector, timber has maintained an impeccable record.
‘‘The global supply of timber is dwindling,’’ said John O’Reilly, chief executive of Green Belt, Ireland’s largest private forestry company. ‘‘A tenth of the world’s forests have disappeared in the last 25 years alone, and this fact, coupled with the strong enforcement of international sanctions to combat illegal, unsustainable logging, means that timber has never been so precious.
‘‘If one also takes into consideration the factors that the level of timber imports into China has grown by an average of 26 per cent a year over the last decade, that Moscow has sharply increased its export tax on logs, and that the demand for timber as a fuel for renewable energy projects worldwide has grown dramatically, then it would be reasonable to predict favourable markets for timber into the future.’’
The concept of investing in forestry in Ireland is not a new one. Green Belt, the national market leader in the area of new forest establishment, has been catering for this type of investment from traditional funds to private investors since the early 1980s.
Investing in a forestry farm can pay off financially as well as environmentally
‘‘Ireland has excellent growing conditions for forests, with production potential running at up to four times the continental average,’’ O’Reilly said. ‘‘This reduces the term of the investment, making it more appealing to a wider cross-section of investors.
‘‘Investors have been attracted to forestry for a number of reasons, varying from tax incentives, with no income tax or capital gains tax on the sale of timber, to timber price growth and the simple desire to own a tangible asset that grows year upon year.
‘‘People also enjoy knowing they will own a specific block of ground on which the forest is growing and Irish investors still have a strong allegiance to land ownership and the benefits this may bring.’’
The product that Green Belt supplies to its investors is ‘all inclusive’
Through its network of strategically based foresters, Green Belt sources land that is suitable, on environmental and economic grounds, for a forestry investment. The company will secure, via the Forest Service, planting approval on these lands, and will then close the purchase of the lands on behalf of the investor.
‘‘Receipt of planting approval ensures that the establishment and maintenance of the forest for the first four years, plus Green Belt fees are 100 per cent covered by grant aid,’’ O’Reilly said.
Positive government incentives are in place to increase the percentage forest cover in Ireland. One hundred per cent grant aid plus an annual tax-free forest premium paid at an average rate of €210 per acre for the first 20 years of a forest’s life are available to investors.
‘‘The intrinsic growth in value of the forest crop added to the grant aid and tax-free forest premium payments, make forestry an all-round attractive investment,’’ O’Reilly said. ‘‘There is also a feelgood factor when one considers future carbon benefits and the positive environmental benefits of establishing a new forest.’’
Green Belt has brought an international dimension to forestry investment with the establishment of high-value tropical hardwood plantations in Panama, over the past four years. Investors have the opportunity to buy shares in special-purpose companies designed to purchase and establish these teak plantations. Green Belt manages 1,630 acres of teak in Panama, and has facilitated the investment of €5.3 million into tropical hardwoods.
Green Belt Ireland and Green Belt Panama staff in this Green Belt 3 year old teak plantation
‘‘Our investment principle is to combine the production of high value tropical hardwood with low input costs, a secure land registry system and low risk to yield excellent returns,’’ O’Reilly said.
John O’Reilly, Chief Executive, Green Belt Ltd
For more information on Green Belt’s attractive Timberland Investment opportunities, contact Green Belt here - or by telephone at 049 - 854 8000