Research

Research plays a crucial role in all phases of our investment process from acquisitions to dispositions.

In-house and collaborative research underlies nearly all of our investment decisions. We write and produce several research documents on a regular basis. These publications are used to educate potential investors, while keeping our current clients informed of topics that may be relevant to their portfolio.

 

Current

January 2020, Timberland Flash Report: Phase One Trade Deal: Potential Impacts on Exports of Forest Products from the US to China

On January 15, 2020, the U.S. and China signed a “Phase One” trade deal that includes structural reforms in intellectual property, technology transfer, agriculture, financial services, currency and dispute resolution. The trade deal also sets commitments by China to greater agricultural purchases in 2020 and 2021.

Current

November 2019, Timberland Investor: US Housing Picks Up

The recent pick-up in momentum in U.S. new home construction is welcome news within the forest product and timber sectors. Housing activity in recent months has responded favorably to attractive mortgage rates and an improved availability of more affordable homes. Builders are shifting their focus to building smaller, more affordable homes for new entrants to the housing market.

Current

September 2019, Hancock Timberland Investor: Understanding Cash Yields

Institutional investors are increasingly focused on securing dependable cash returns for their portfolios, and the relatively stable cash returns associated with timberland have attracted interest, particularly in light of the declining yields of fixed-income assets and the more pronounced volatility in the cash yield of some alternative real assets.

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July 2019, Hancock Timberland Investor Brazil

Over the past year, Brazil, along with other major Latin American countries, has seen extremely stable interest rates. Current economic weakness in Brazil in parallel with a slowing global economy, however, almost certainly spells impending interest rate cuts. Interest rates in Brazil have remained historically low at 6.5 percent since April 2018 – after multiple rate cuts in 2017 from double-digit highs. Brazil’s current rate is competitive with other Latin American economies such as Colombia at 4.25 percent, Chile at 2.6 percent and Peru at 2.75 percent.

Current

Natural Resource Flash Report, August 2019: The U.S.‑China Trade Tensions Escalate

On August 6th 2019, China ordered its state-owned enterprises to suspend all agricultural imports from the U.S., in response to the recently announced 10% tariffs on the remaining $300 billion worth of Chinese goods by the U.S starting in September. Private buyers in China have followed suit, citing uncertainties in the U.S.-China trade talks.

Current

April 2019, Hancock Timberland Investor Brazil

One year following the announced merger of two of Brazil’s major pulp and paper producers: Fibria Celulose S.A. (FIBR3) and Suzano Papel e Celulose S.A. (SUZB3), a giant integrated business has emerged. The new Suzano S.A., has a market capitalization of BRL 63 billion and is now the eleventh largest company by market cap on the Ibovespa. Suzano’s dominant position in global market pulp was highlighted this past January in an environment of otherwise weak underlying demand: global producer stocks of bleached chemical market pulp hit record highs, yet Suzano was able to hold the line on price and actually achieved some modest price increases in China for both softwood and hardwood grades.

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February 2019, Hancock Timberland Investor: 2018 U.S. Timberland Investment Performance

U.S. private timberland investments returned 3.2 percent in 2018, a decrease of 42 bps in total return from 2017. Strong returns in the West offset lackluster return performance in the South and Lake States. Record high delivered log prices in the West supported healthy gains in both timberland income and capital appreciation. Timberland investments in the South generated average income, yet capital appreciation registered a modest decline as expectations scaled back regarding prospects for southern timber markets. The moderating assessment of southern timber markets occurred in the face of growing capital investment in the region’s lumber industry, which should add substantial new demand for pine sawtimber.

Current

January 2019, Hancock Timberland Investor Brazil

As Jari Bolsonaro moved towards his October victory in the second-round of the presidential election, Brazil’s equity benchmark index, the Ibovespa rebounded. Rising from a low-point in June of 69815, the Ibovespa gained 17 percent by early August as Bolsonaro rose in the polls. Following Bolsonaro’s victory with 55 percent of the votes in the second round, the Ibovespa rallied, gaining an additional 10 percent by early November. Subsequently, the Ibovespa has traded in a relatively tight range, averaging 87551 in December and early January, which is a modest improvement (4 percent) over the average sustained in the first 5 months of 2018, prior to the mid-year correction.

Current

2017 Q3, Hancock Timberland Investor: China’s Softwood Log Markets – Impending Change

China is the largest importer of softwood sawlogs in the world, with a decades long trend of rising imports which reached a new peak in 2017. Yet, China may be approaching a turning-point as a build-up in its debt levels clouds the prospects for China’s construction sector while at the same time, China’s preference shifts from importing unprocessed sawlogs toward favoring lumber.

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2017 Q2, Hancock Timberland Investor: A Potential New Source of Demand for U.S. Timber: Cross Laminated Timber

A new building product, Cross Laminated Timber (CLT), is beginning to gain traction in the U.S. and has the potential to add significant new demand for timber from a wide array of forest types. CLT use will be focused on market segments outside of the core markets for traditional lumber and wood panels (single-family residential construction). CLT will be competing more directly with concrete and steel construction. Implications for timber markets will be distinctly different than the major introductions of new wood products over the past thirty years—oriented strand board, medium density fiber board, and engineered wood I-beams— which took market share from building materials already made from wood.

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