The UK forestry market value has risen to more than 200% in the last 5 years. The research “'Spotlight on the UK Forestry Market 2016”, which presented this result, also showed that more than £130 million were traded in 2015 and the average value per hectare also increased, according to FarmingUK.
Following a stable market of the last 4 years, the transactions of the forestry areas increased by 30% to 21,000 hectares in 2015, compared to 16,000 hectares in 2014.
This increase was due to the sales which happened off-market, such as the 16 properties sold by UPM to the Church Commissioners, for which they received £50 million. Also, during 2015, the average value per productive hectare reached £8,615, rising by 13.5%.
As FarmingUK reported, the South Scotland region had the highest value, followed by the Borders, both of them being focused on timber production. England and Wales follow, where the prices have strengthen over the mentioned period.
“In 2015 we saw some polarisation in the market, with forest properties that did not tick all of the boxes, in terms of normal investment criteria, sticking on the market unless competitively priced. Forest values are increasingly influenced by the productive capacity of the asset. Well managed commercial spruce forests, that are high yield class with good access to timber markets, will remain in strong demand. Younger forests, or land for new planting, may also tempt those who anticipate a seismic shift in timber prices in the long term, say 20 to 30 years,” said Jamie Adamson of Scottish Woodlands.
He added that investors should consider a 10-year “investment horizon” and that wood will reach a higher demand as there already is a strong order for wood fiber, an increasing wood use in construction and an increasing world population.
[gravityform id="1" title="true" description="true"]
[gravityform id="2" title="true" description="true"]
