A strong year for forestry

3 December 2019

The average price of commercial forestry on the market rose by 23% over the last year, according to the latest UK Forest Market Report produced by Tilhill Forestry and John Clegg & Co.

The report outlines a positive outlook for the “robust” market in its annual analysis and commentary on the forestry and woodland sector and highlights its “powerful attraction as an investment asset”.

Key findings included a 21% increase in the total value of the forestry market; commercial forestry transactions worth £126.5m completed in the past year; and 69% of properties sold above their guide price, with 14% of properties selling at more than 150% over guide.

“Our report for 2019 shows that forests have continued to rise in value,” said Fenning Welstead, director at John Clegg & Co. “With the softening of timber prices this year, it might be thought that forest property values should follow suit. This is not happening and we believe that this is a direct reflection of the trend towards renewable resources and a move to a low carbon economy.

“We believe the rise in land values reflects a desire to have such a fundamental asset as part of an investment portfolio. Ownership offers opportunities for alternative land uses; for example, renewable energy and commercial forestry crops are a popular blend. Additionally, with a potential carbon tax in development there is the possibility of an annual income for sequestering carbon.”