Timberland sits firmly within this universe and has historically been viewed as a reliable component of real asset portfolios due to its biological growth characteristics, supply discipline and long-term demand fundamentals. 

From 1991-2024, timberland has delivered average returns of 9.1 per cent annually, outperforming commercial real estate, corporate bonds, gold, and even the FTSE All Share Index, with relatively low correlation to traditional asset classes. For many institutional investors the appeal has been straightforward: trees grow irrespective of financial market cycles, harvesting can be deferred in favourable price environments, and biological growth compounds asset value over time. 

Performance differentiation within the timberland asset class increasingly reflects managers’ ability to integrate climate and ecological considerations into operations and asset selection. These factors have evolved from long-term planning inputs to active components of portfolio management and operational strategy. Varying regional exposure to drought cycles, pest pressures, wildfire risk, and weather variability creates meaningful differences in asset-level outcomes. In this environment, inflation protection derives not only from price appreciation but from the biological resilience of well-managed timber stands, underscoring the importance of active stewardship and regional diversification.

Read the full ‘Thought Leadership’ article at the link below