The €200m forestry fund linked to UK investment firm Gresham House and Coillte has already purchased close to 1,100ac of forestry ground, the Irish Farmers Journal can reveal.
The property at Castlewaller near Newport in north Tipperary was bought for €5.5m by the Irish Strategic Forestry Fund, the investment vehicle launched by Gresham House last week.
The purchase involves standing forest and marks the start of a major land purchase drive by the new forestry fund.
The acquisition was registered just prior to the Christmas break. The property is understood to have been bought from a private forestry business.
The launch of the Irish Strategic Forestry Fund, which aims to develop a 12,000ha portfolio of new and existing Irish woodlands, has provoked serious concerns and strong opposition among the farm organisations, private foresters and rural politicians.
Fears have been expressed that the Gresham House fund will add further fuel to an already very competitive land market, by pushing up the base price of land for forestry.
Such land is currently making a maximum of €5,500/ac to €6,500/ac but some commentators expect that this could now increase to €7,000/ac to €9,000/ac depending on land quality and location.
The role of Coillte in providing the expertise to manage the new fund’s forests, and the decision by the Ireland Strategic Investment Fund (ISIF) to invest €25m in the venture, has also come in for criticism.
Coillte has stated that it aims to plant 100,000ha of new woodland by 2050 in conjunction with capital supplied by foreign investment funds.
The joint venture between Coillte and Gresham House means the UK investment fund will benefit from the forestry premiums on offer on all planted ground – which Coillte have been prevented from receiving since the early 1990s – while the State body will be paid to manage the British firm’s woodlands.
The Gresham House fund could potentially access €134m in forestry premiums and €46m in planting grants if 12,000ha are planted.
Revenue has confirmed to the Irish Farmers Journal that profits and gains from woodland in the State, which are managed on a commercial basis, are exempt from income tax and corporation tax for both individuals and companies. Gresham House has said “all appropriate Irish taxes will be payable by the fund”.
What is even more horrifying is that this is being funded by the Irish taxpayer to the tune of €2bn
Marina Conway of Western Forestry Co-op said she was “horrified” that the Government was enabling Coillte to act as an agent on behalf of a foreign investment funds to effectively take 100,000ha out of local ownership.
“What is even more horrifying is that this is being funded by the Irish taxpayer to the tune of €2bn,” Conway added.
Sligo-Leitrim TD Marian Harkin described the decision by Coillte to link up with investment funds to purchase farms for planting as a “land grab”.
Harkin said the proposed partnership will inevitably drive more farmers off marginal ground as they will be unable to compete in the land market with the investment funds.
“This land grab financed by very significant grant aid and single farm payments where there are entitlements on the land, will push prices way beyond the reach of active local farmers,” Harkin said.
Similar concerns were raised by the farm organisations. Expressing alarm regarding the link-up between Gresham House, Coillte and ISIF, the ICSA leader Dermot Kelleher asked why the country’s strategic investment fund was being used to finance the purchase of Irish land by international corporations.
The IFA, ICMSA and INHFA all questioned why State organisations and Government investment funds were being used to effectively increase land prices on farmers.
‘Every right to be angry’
Teige Ryan of the private forestry body SEEFA described attempts to justify this arrangement by Minister Charlie McConalogue as “completely dishonest” and claimed that rural Ireland had “every right to be angry”.
Gresham House said its Irish Strategic Forestry Fund had already attracted €35m from Irish investors, including the €25m from the Ireland Strategic Investment Fund (ISIF).
Along with purchasing land for planting new forests, Gresham House said its fund will also “acquire existing forest assets”.
“This initiative will create a platform for enhancing Ireland’s forestry sector, delivering real change and momentum and making a meaningful contribution to Ireland’s crucial afforestation ambitions,” said Patrick Lawless, managing director of Gresham House, Ireland.
Coillte chief executive Imelda Hurley said the State body was pleased to work with Gresham House in what she described as an “important initiative”.
“There is an urgent need for Ireland to meet stretching climate action targets and creating new forests is integral to the achievement of these targets.
“The Government’s national afforestation target is 8,000ha per annum and the long-term target is to achieve 18% forest cover. Currently forest cover in Ireland is 11.6% compared to an EU average of 40%,” Hurley pointed out.
“The new Irish Strategic Forestry Fund represents an important first step towards accessing the capital required to enable the creation of new forests which will deliver the multiple benefits of forests for climate, nature, wood and people,” she said.
Gresham House is a UK-based asset management group, with interests in forestry, housing, infrastructure, renewable energy and battery storage, as well as public and private equity.
Quoted on the London Stock Exchange, the firm actively manages around €8.5bn of assets on behalf of institutions and private investors.
Gresham House manages extensive forestry investments internationally and manages over 130,000ha of woodland in the UK. These are worth over €2bn. ?
In Ireland, Gresham House provides asset management services on over 4,000ha. Gresham House in Ireland was originally established in December 2002 as Appian Asset Management and rebranded following its acquisition by Gresham House plc in June 2021.