BIRMINGHAM, AL, January 24, 2020 – The National Council of Real Estate Investment Fiduciaries (NCREIF) has released fourth quarter 2019 results of the NCREIF Timberland Index. The index returned -0.04% for the quarter, down from 0.18% last quarter and 0.75% in the fourth quarter of 2018. The EBITDDA return, at 0.64%, decreased by 3 basis points from last quarter and by 13 basis points from a year ago. Appreciation return in the fourth quarter was reported at -0.68%.
The Total Timberland Index had a 1.30% rolling one-year return, with a 2.68% EBITDDA and -1.36% appreciation return.
Timberland Quarterly Total Return Trends by Region
The Northeast and Northwest regions saw a drop in returns from prior quarters. The total return for the Northeast was -1.19%, with an appreciation return of -1.71%. The Northwest region reported a negative total return for the second consecutive quarter, -2.46%, primarily due to an appreciation return of -2.94%. The South continued to have moderate growth, with a fourth quarter total return of 0.94%, driven largely by steady EBITDDA returns (0.74% in the fourth quarter). The Lake States region reported a strong total return of 4.20% for the fourth quarter after three consecutive quarters of sub 1% growth, bolstered by an appreciation return of 3.85% for the quarter.
Timberland Market Value per Acre in USD by Region
Timberland market value per acre, at $1,874 as of the fourth quarter, saw a 1.42% increase from $1,848 over the past year. Within the regions, the South saw the only quarter-over-quarter increase, with market value up 0.27%, for a yearly increase of 1.07%. The Northeast had a year-over-year increase in market value of 17.84%, while the Lake States and Northwest have seen a decrease over the same period at -1.84% and -4.05%, respectively.
The NCREIF Timberland Index consists of 451 investment-grade timber properties with a market value of $23.2 billion. This includes 307 properties in the South, 90 in the Northwest, 36 in the Northeast, and 17 in the Lake States. This data enhances the ability of institutional investors to evaluate the risk and performance of timberland investments across the United States.