Forestry Investment Reports

Every year in September, Savills produce a report on the market for forest properties. This focuses predominantly on larger conifer plantations in Scotland but takes smaller broadleaf woodlands in England into consideration. Jonathan Henson, the director of rural services at Savills remains upbeat “Over the past 12 months a combination of strong demand, and the high quality and maturity of woodland on the market, resulted in an increase in the average sale price of 49% per stocked hectare.

True to form the sector has not been susceptible to short term fluctuation”.  The report highlighted average values in England of £12,000 per hectare, nearly double the rate in Scotland, and with significantly higher rates for properties which come on the market in attractive locations.  Savills feel that the interest in forestry will endure through 2013 providing there is no significant increase in supply.

John Clegg and Co, who sell over half the woodland in the UK, were recently quoted in South West Farmer “There is strong demand at the moment for anything that comes available.  I would say woodland is currently the best performing sector in the UK property market”.  Cleggs report average values ranging from £1500 per acre to £7,000 per acre, with some small woods making £10,000 an acre.  Smiths Gore, looking over a longer period (1992-2011) report a 7.7% real terms return on investment, from a combination of timber sales and land value.  Strutt and Parker record a doubling of woodland values in Yorkshire since 2008.

In the forestry sector continuing reliance on timber imports maintains investment interest.  Last year UK production of softwood was nearly 10 million tonnes, with hardwoods a mere 500,000 tonnes.  Imports exceed both at over 18 million tonnes (Source: Forestry Commission).  However, for the small amenity market, firewood remains an important driving force for both purchase and management.  Many small woodland owners start their journey with the aim of producing their own firewood as an environmentally friendly, almost carbon neutral, fuel.

Following the public outcry in 2010, when the Government announced plans to sell 15% of the public forest estate in England, a total block on Forestry Commission sales in England remains.  With renewed interest in woodfuel and traditional timber markets, it is unlikely that the supply of woodlands to the west country market will increase, and we think that land values will continue to ride out the downturn in the economy.

Further information:

Market Report

Forestry Facts and Figures