Discount rates used for forest valuation - Results of 2009 survey

Abstract

A total of 23 forest valuers responded to the survey
\nand provided information on 25 New Zealand and four
\nAustralian transactions in 2020 and 2021. The average
\nreported implied discount rate (IDR) for the New
\nZealand transactions is in the range 3.4% to 9.5% for
\ncurrent rotation pre-tax cashflows (17 transactions) and
\n4.7% to 8.4% for multiple rotation pre-tax cashflows
\n(14 transactions). Overall, averages are 6.2% (current
\nrotation) and 6.6% (multiple rotations) compared
\nto 7.3% and 7.1% in the 2019 survey. IDRs for the
\ntransactions of medium or large forests are, on average,
\nlower than those for small (<1,000 ha) forests, 5.3% vs
\n6.9% for current rotation pre-tax cashflows and 6.3% vs
\n7.3% for multiple rotation pre-tax cashflows.