Case Study: ‘We Decided To Branch Out Into Forestry’
Darcy Webber and his wife Ashleigh went looking for other assets to add to their share portfolio.
18 October 2021
JUNO Autumn 2021
Tauranga self-employed fisheries consultant Darcy Webber and his wife, Ashleigh, had been investing in the share market for a couple of years when they decided they wanted a change.
Webber says he was keen to diversify into other areas, but he wasn’t exactly excited by the returns he could get for bank term deposits.
“Basically, I’m just saving for retirement, but I don’t want to leave any money in the bank because things are pretty slow now.”
He says he searched for alternatives online. “I’m trying to learn as I go. I finally stumbled across the forestry blocks that we ended up investing in. We bought shares in two different blocks with Forest Enterprises.”
He had a couple of friends working in the industry, so he ran the idea past them.
“Forestry seemed to be one of the few things that are returning well.
“It seems to me that it’s still having reasonable returns on investment, around the 8 per cent per year mark.
“Everything else is just sort of trucking along lately, unless you get into more risky ventures – but I’m not really willing to do that.”
After investing in 200 shares in each of two new blocks, he realised having different maturity dates would spread his risk further, so he went looking again.
“I’m actually trying to purchase more – to buy the forestry shares that other people are trying to offload. They keep popping up online.”
His first two investments are both in the lower North Island, the Wairarapa Group Investment, and the Ngatawhai Investment, which mature between 2038 and 2046.
The Wairarapa Group Forest Investment is 970 net stocked hectares of high-quality forestry, across three geographically separate second-rotation forest properties in the Wairarapa.
The Ngatawhai Group Forest Investment is a single forest property in Wairarapa, with 627 net stocked hectares of second-rotation pine forest, native bush, and wetland.
Webber has bought 200 shares of each, and he’ll pay annual contributions until they’re harvested of around $1000 per 200 shares for the ongoing costs of the forests.
With these investments already in his portfolio, Webber says he’s now looking at buying into blocks that will be maturing in the next five years.
He’s aware there are risks in forestry, of fire, disease and market conditions changing.
“I’m pretty comfortable with those risks. They’re different maturities and different blocks, which spreads the risk as well.
“I don’t want to put all my eggs in one basket, that’s for sure.”
He says he’s excited to check out his new investment in person.
“If they have an open day, I’d quite like to go along and have a look.”
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Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.