US timberland transactions hit $1.6bn in 2014

Timberland transactions in the US hit $2.6 billion last year, with 45 major transactions, according to RISI, the forest products industry information provider.

Total deal flow in the sector since 2010 now tops $14 billion.

In the US in 2014, 27 out of the 45 major deals occurred in the South. These totalled $1.75 billion and 1.1 million acres. The Northwest was the second most active region posting 15 deals worth $680 million and 818,000 acres.

Source: RISI

Hancock Timber and Resource Management Service were the leading timberland sellers among timber investment management organisations (TIMOs) and real estate investment trusts (REITs) in 2014, each transacting $400 million in ten major transactions nationwide, according to the RISI Timberland Markets Report released in February.

The top buyer last year was Potlatch, which acquired 201,000 acres in Alabama and Massachusetts from RMS for $384 million late last year, according to RISI.

For total assets under management, the European market accounts for 8 percent, Australia 8 percent, Latin America 6 percent, and Africa 1 percent. The North American market gets the largest slice of the pie at 77 percent, director of international timber Bob Flynn told Agri Investor.

According to RISI, Institutional investments in timberland are nearing $100 billion globally. While 75% of institutional investment in timberland has come from North America, some players like TIAA-CREF, PSP and Harvard Management Company. have been expanding their investments, reaching out to New Zealand, Uruguay and Chile, the statement said.

The RISI Market Report added the outlook in 2015 was that: “many are confident, a few are bearish and some are in between, one TIMO executive expects a ‘really good year’ while another sees ‘a cloudy picture.’” A third suggests a slowdown in 2015 as the pipeline, especially in the US West, was drained in 2014.

“Nonetheless, other veteran buyers described potential for ‘two or three’ huge unnamed deals this year in the $200-300 million range, variously including one sale each by a TIMO, a REIT and a private concern.”

Pending transactions on the watch-list for 2015 include Hancock selling 21,400 acres in Pennsylvania and New York, RMS looking to sell 17,600 acres in Georgia for $30.3 million and Campbell’s pending deal with Southern Pine for divesting 9,900 acres in Arkansas.