The report, launched in Edinburgh on November nineteenth and London on November twentieth, offers essentially the most complete overview of the UK forestry sector, detailing key monetary developments, market insights, and rising funding alternatives.
Market Overview: Resilience Amid Financial Shifts
In 2024, £95.4m of forestry was listed on the market within the UK, a 55% lower on the earlier 12 months. The market numbered 44 properties with a complete of 5,400 stocked hectares and a mean valuation of £18,600 per hectare. Scotland continued to dominate with a 79% market share.
This 12 months noticed a drop within the pricing of agreed offers. Nevertheless, an unusually excessive proportion of northern Scotland properties, that are sometimes decrease in worth because of the distance from core timber markets, distorted the market. When adjusted for outliers and northward skews, likefor-like valuations had been near flat, reflecting a wholesome calibration after a few years of steep will increase. Sturdy demand for belongings remained, regardless of difficult headwinds.
Investor sentiment was cautious however regular. With higher political certainty after the price range, the report forecasted loads of alternatives in 2025, with a number of high-value properties anticipated to return to the market. In seeking to the long run, the report requested: “Would possibly the brand new authorities’s drive for extra development present each a requirement for timber and have a knockon impact of decreasing the nationwide resistance to land use change?”
Forestry Market Report 2024
Planting land: A Shrinking Provide
- In Scotland, the quantity of land out there on the market dropped by 40% to 1,600ha, as availability of land appropriate for business forestry continued to tighten regardless of sustained demand. Pricing for land has nonetheless stabilised at round £10,000 per gross hectare.
- Planting land listed in England elevated 92%, to 1,600ha, and averaged £14,500 per gross hectare (13% down).
- In Wales, planting land additionally elevated by 92%, to 1,300ha, with the common at £16,800 per gross hectare (26% up).
The warmth has come out of the market however demand for planting land positively nonetheless outstrips provide, which has been drastically diminished during the last 18 months, the report mentioned.
Sustainability: Addressing Environmental Challenges
Good silviculture might be key to the way forward for the sector, mentioned the report. Whereas Sitka spruce stays dominant, the business faces growing environmental pressures, together with droughts, pests, and local weather change. Consultants burdened the necessity for species variety and improved silviculture practices to make sure long-term resilience. Efficient forest administration, with a concentrate on sustainability and biodiversity, might be important to safeguarding the sector as local weather change impacts forest well being.
Carbon Credit and Pure Capital: A Rising Funding Alternative
The marketplace for woodland carbon is at an necessary juncture with the subsequent few years doubtlessly providing “wealthy alternatives”, the report famous. Tasks with ecological advantages, equivalent to biodiversity and water high quality enhancements, achieved 2-3 occasions larger costs for carbon credit than customary charges, highlighting the demand for sustainable land investments.
In England, properties with pure capital alternatives rose by 16% to £14,500 per gross hectare, doubtlessly pushed by the affect of Biodiversity Web Acquire (BNG) laws. In the meantime, land with pure capital potential dropped 44% to £3,100 per gross hectare in
Scotland (distorted by a few highland estates supplied at comparatively low costs) and rose 7% to £18,100 per gross hectare in Wales.
Timber Market: Steady Demand and Progress
The UK timber market stays steady, underpinned by a wholesome urge for food for small roundwood and pallet wooden. Costs had been regular, and timber fibre was in demand at related charges. This ongoing demand, mixed with bushes’ annual progress of 5-6%, makes forestry land a useful, inflation-resistant funding.
Skilled Insights: Market Sentiment and Funding Outlook
Xander Mahony, Head of Forestry Funding at Tilhill Forestry, commented: “This 12 months’s report exhibits a resilient but evolving UK forestry sector, the place, regardless of investor warning, there may be sturdy demand for high quality belongings. Steady timber costs, recovering curiosity in pure capital initiatives, and the rise of biodiversity laws are driving progress”.
Jon Lambert, companion at Goldcrest Land & Forestry Group, echoed this sentiment, noting that consumers had been “considerably cautious and selective”, just like final 12 months. Uncertainty across the Labour Authorities’s first Price range created appreciable exercise instantly beforehand and he pointed to the enduring enchantment of land and forestry-based investments.
He added: “We’ve got positively seen a mature market shopping for forest belongings that’s centered on rising timber, a world commodity in brief provide, with taxation incentives being much less of a driver.”
