IFGL - Timber REITs: Catching Fire

• Timber REITs, which were slammed at the outset of the pandemic, "caught fire" in late 2020 - both literally and figuratively - ending 2020 as the fifth best-performing REIT sector.
• Reignited by the red-hot U.S. housing market, lumber prices have soared to record-highs as insatiable demand from homebuilders has clashed with reduced supply levels as timber producers scramble to catch-up.
• Initially caught flat-footed by the velocity of the rebound in lumber demand from homebuilding and remodeling activity, fourth-quarter earnings results showed that timber REITs are now firing on all cylinders.
• Lumber production - and soaring prices - have become a bottleneck in the housing industry value chain, but the full potential of the vertically-integrated timber REITs should be unleashed in early 2021.
• For investors that can tolerate volatility and modest dividend yields, long-term fundamentals look compelling amid historic levels of demographic-driven housing demand and record-low housing supply.

For further details see: