Specialist broker for agricultural, forestry and equestrian real estate

SAFETY FORST - Greif & Meyer interviewed by procontra magazine on forest investments

Sustainability is en vogue. More and more sustainability-oriented investors are looking for suitable investments. What could be more obvious than an investment in the German place of longing par excellence - the forest?

The asset class is enjoying growing popularity, not least due to low interest rates. "The demand for forest land has risen in recent years," reports Andreas Eßer from forest broker Greif & Meyer, which is also reflected in the rise in prices. If you want to buy a piece of forest in Germany, you have to dig deep into your pockets: Prices range from 50 cents to five euros per square meter. "There are two components to the price," explains Eßer, "the soil and the growth, i.e. the tree population." Then there is the location. "You have to pay more for a piece of forest on the outskirts of Munich than for a rural location in Brandenburg."

With yields in the lower single-digit range, the profit margin is clear. It is also important to factor in pest infestations, fires and droughts. "Over 180,000 hectares of forest were damaged in 2018 and 2019," says Larissa Schulz-Trieglaff from the German Forest Owners Association, recapping the drought in Germany in recent years. This also caused the price of timber to plummet. While up to 100 euros were paid for a meter of spruce trunk wood in 2016, it is currently only 50 to 60 euros - and as little as 30 euros in the case of bark beetle infestation.

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