Scotland to the fore as net zero drive sees commercial forestry values jump by 15%
Commercial forestry values have risen by at least 15 per cent in the past year with Scotland leading the charge, a new industry report has revealed.
Increasing demand for timber assets driven by net zero ambitions contributed to rising prices in a market characterised by fewer but higher value sales in 2022, according to the latest UK Forest Market Report. Scotland “spearheaded the charge for economic forestry” with an 84 per cent share of UK commercial forestry sales. Meanwhile, the land available for natural capital projects including native afforestation, peatland restoration and rewilding also trebled over the past year, a sector led by England.
The report - described as the most comprehensive review of the market - has been produced by Tilhill, the woodland creation, forest management and timber harvesting company, alongside specialist forestry firm Goldcrest Land & Forestry Group. It estimates that the market was worth “well over” £200 million - taking into account a considerable number of off-market sales on top of the £195m monitored by the two firms.
Greater awareness of the benefits of broader natural capital increased interest in opportunities offering wetland, islands and other diversity, the report noted. Limited supply and the sale of a handful of premium forests in the south of Scotland saw the average value of commercial forestry rise by an estimated 15 per cent over the year. However, the report noted that there were some outstanding “outliers” that achieved sale prices well above this curve.
Xander Mahony, head of forestry investment at Tilhill, said: “Commercial forestry values continue to be driven by increasing demand from institutional investors facing constrained supply. This year in particular has seen supply at the bottom end of the historical range.”
The total land planted in the UK rose by 4 per cent with broadleaves overtaking conifers for the first time since 2016. Some 76 per cent of all new planting - and 93 per cent of total conifer planting - took place in Scotland.
Fenning Welstead, partner at Goldcrest Land & Forestry Group, said: “To date we have been tinkering around the edges. A future with much greater emphasis on renewable energy and raw materials will surely have to rely more on trees.”