James Carthew at Citywire seems impressed and believes this could be more sustainable than previous forestry firms due its diversification into afforestation. From the prospectus they list the seed assets as 59% forestry and 38% afforestation. Almost all the assets in the Bidding stage of the pipeline are afforestation. They mention that they would hold onto most of their carbon credit until the 2030s when they expect the price to be much higher. They also seem pretty confident of eco-tourism and renewable energy co-location:
Forestry land often lends itself well to wind farm developments and run-of-river / run-of-hill stream
hydro projects. Increasingly wind farms may be co-located with battery storage in the future. These
sustainable infrastructure assets need road access, grid connections, electrical sub-stations and
other such utilities. Largely these involve leasing of the underlying land and a profit share
mechanism with the developer and/or future owner of the renewable energy or other sustainable
infrastructure assets. Wind turbines are now much larger in height than previously was required to
make them economical with the historic subsidies that were available and the planning constraints
that were in place. Positively for forest owners, in the post-subsidy world and with a revised attitude
from the planning authorities, larger turbine heights are now a reality. This means that wind turbines
can be ‘key-holed’ into forestry areas and the surrounding trees have a far less material impact on
the wind resource than was the case with smaller turbines.
At some forestry properties the landscape, access and overall site lends itself well for the
development of glamping and/or low impact wild camping businesses. Suitable sites are usually in
or adjacent to forests/woodlands in reasonably accessible beauty spots where the site offers rich
natural capital, biodiversity and stunning scenery. Foresight Group is exploring a number of such
opportunities in the Target Seed Forestry Assets.
Interesting tidbit - they mention new technologies such as Accsys’ as facilitating growth in timber.
I’ve wanted forestry exposure for some time so I think I’ll bite the PrimaryBid offer and get in at IPO. Downsides are probably that hefty 1.3% TER and lack of overseas assets but the UK is the least forested country in Europe by a huge margin and has a favourable climate so to put it bluntly there’s lots of work to do at home.
Investor flyer: https://media.umbraco.io/winston/zvaneqfv/fsfc-plc-teaser-october-2021.pdf