The traditional characterisation of timberland as a fringe or “alternative” asset class is increasingly difficult to sustain in the face of contemporary economic data.
For several decades, institutional interest in forestry was driven by a relatively straightforward proposition: biological growth provided a reliable source of returns that remained largely indifferent to the fluctuations of the broader financial markets. However, the findings of the Gresham House Global Timber Outlook 2025 (GTO) suggest that we are entering a period of profound systemic change. The forestry sector is no longer just a source of portfolio diversification; it has become a focal point where global demographic pressure, the requirements of decarbonisation, and severe biological constraints intersect.
The architecture of demand: Demographics and decarbonisation
Projections from our GTO indicate that the global demand for coniferous sawnwood, the primary material used in structural construction, is set to increase by between 50 per cent and 80 per cent by 2050 relative to 2022 levels. This forecast is not the result of speculative optimism but is grounded in two primary structural drivers.
The first is a chronic global housing deficit. As the world population continues its trajectory towards 10 billion, the requirement for basic infrastructure and residential units has reached a critical point. In developed economies, the shortfall is particularly acute. For example, the United Kingdom consistently fails to meet its annual housebuilding targets by significant margins, and similar deficits are observed across North America and Western Europe. In emerging markets, the pace of urbanisation necessitates a volume of construction material that historical supply chains were never designed to accommodate.
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