2023-10-20 04:25:00
The forest does not escape the degradation of the economic environment. “We have noted an inflection in the market since the beginning of July 2022”, notes Benoît Léchenault, director of Agrifrance, a department of the BNP Paribas Wealth Management group specializing in the rural land, wine estate and forestry markets. Demand is slowing following the 12% drop in construction (housing, etc.) and the decline in wood imports from China. This resulted in a decrease in wood prices for the first time in five years during the last six months of 2022. Thus, note Agrifrance experts, after having increased by 10.69% over the last five years, the price of oak has fallen by 6% and that of ash, by 4%. Even more significant is the fall in the price of softwoods (from – 20 to – 30%), whether Douglas fir, spruce, fir or pine.
The year 2023 confirms the trend, even if demand for high-end oak has supported prices while imports from Vietnam have driven up ash prices. “Uncertainty is growing,” notes Benoît Léchenault, who also mentions the slowdown in the construction market in the United States. Added to this are the concerns of professionals in the sector about the increase in their costs: transport, electricity, etc.
75 %
tax exemption
This is the amount of the reduction on gift and inheritance taxes on the taxable value of forest heritage.
Assets. “This context could weigh on the price of forests”, predicts Benoît Léchenault. In 2022, the market remained dynamic, with 155,000 hectares sold, representing an average increase in sales of 4.6% (5.3% for forests of more than 100 hectares). The average price per hectare increased by 4.2% to 4,630 euros in one year, bringing the average increase to 3.3% per year in ten years. An average which hides gigantic differences depending on the type of forest and their location. Prices range from €700 to €14,800/ha, and 80% of transactions concern areas of less than 10 hectares. The interest of private or institutional investors for lots of more than 100 hectares is hampered by the lack of offers. Nevertheless, 21,850 transactions, for an amount of 2.32 billion euros, took place in 2022, an increase of 140% in ten years. In addition to the patrimonial aspect – the holding of a real asset that has meaning – and the decorrelation with the stock markets, individuals are attracted by the tax advantages, in particular the 75% reduction on gift and inheritance taxes. §
BIG PRICE DIFFERENCES
TRANSACTIONS: +140% IN TEN YEARS
Pictet Asset Management
Le Point: Why invest in biotech, a sector that has underperformed since the start of the year?
The rise in the indices is due to the outperformance of seven stocks linked to artificial intelligence. In an uncertain macroeconomic context, biotechs make it possible to invest in shares in a way that is not correlated to the evolution of the activity, particularly in relation to the evolution of interest rates. The universe has gained depth. It is becoming more standardized: it includes more mature stocks, listed on the stock exchange, with a pipeline of products in phase 2 or 3, close to being approved by the American drug authority (FDA), which increases their visibility . Company valuations have also declined. Above all, these companies are courted by large laboratories, many of which are suffering loss of income. The number of acquisitions has increased significantly since the start of the year.
What values do you hold?
Those that are making real medical advances, such as Krystal Biotech for skin diseases, Argenx for blood diseases, Biogen/Eisai (Leqembi) for Alzheimer’s disease, Gilead for cancer, etc.
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