The NCREIF Timberland index returned 9.69% in 2013, its highest return since 2007 when the index returned more than 18%. Last year’s return consisted of 2.8% income and 6.75% appreciation.
Timberland returned 7.75% and 1.58% in 2012 and 2011, respectively.
Mary Ellen Aronow, senior forest economist at Hancock Timber Resource Group and chair of the NCREIF timberland committee, noted in a news release that properties contributing 70% of the index’s market value were appraised during the fourth quarter. Appraisers “recognized a strengthening timberland market, with lower discount rates, citing timberland transaction evidence which indicates higher land values. In some cases, appraisers have also raised their outlook for timber prices.”