Though fragmented and non-transparent, the forest real estate market is attractive

• Forests account for the second largest land use in Germany behind agriculture. Around a third of the surface area of Germany is covered with an estimated 90 billion trees.
• Approximately half of this forest is in private ownership. Large forest owners are very few in number and the majority are noble families.
• The transaction market for forest property is also very fragmented. On average, only approximately two hectares change hands per transaction for €15,000. The annual transaction volume totals little more than €300m.
• Owing to the fragmentation and lack of transparency, the German forest real estate market is difficult to enter for institutional investors.
• However, the importance of the sector in other countries demonstrates that there are sound reasons for investing in forest property, the strongest of which is value stability. Against this background, the German market promises significant growth potential.