- 20 September 2012
AN AUSTRIAN investor has just acquired a large chunk of land in Ireland – 921 acres in a forestry investment portfolio spread over 20 locations in six counties. The businessman has paid €3.85 million for a range of properties in counties Kerry, Clare, Laois, Leitrim, Mayo and Roscommon which had been assembled and planted by Irish Forestry Services Asset Managers (IFSAM) over a 30-year period.
The sale to an overseas buyer is unusual as in the past most of the large forestry portfolios which came on the market were bought by Irish interests. Trevor McHugh, managing director of Irish Forestry Services, said that while forestry as an asset class had generally been traded within the Irish forestry industry his board decided that a wider marketing campaign was appropriate on this occasion to secure a sale.
Fintan Tierney of DTZ Sherry FitzGerald, who handled the sale, marketed the portfolio primarily through a bespoke internet-based campaign as well as the DTZ international network. “We received over 165 enquiries from Irish and overseas investors, some of them for parts of the portfolio and others for the entire investment,” he said.
A few hundred investors who put money into The Third Forestry Investment Plan got tax-free returns of 46.6 per cent with the sale of the portfolio. As a strategically important national industry, Irish forestry attracts Government grants and is a tax efficient investment vehicle for investors. Tierney says there is a growing domestic and overseas interest in buying into Irish forestry as it is considered a safe haven asset class for experienced investors.
Ireland is seen as an ideal location for softwood with trees generally growing around three times faster than elsewhere in Europe. However, only 11 per cent of the land mass is given over to afforestation compared to an EU average of 38 per cent. Ireland is still importing timber for use as pallets, stake wood, medium density fibre board, biomass, pellets and pulp.
Earlier this year Minister for Public Expenditure Brendan Howlin said “consideration will be given” to selling some of the assets of the forestry board, Coillte. However, he ruled out the sale of Coillte land which amounts to about 7 per cent of the land cover of Ireland.