Average forestry values rose by 21% in 2021

Forestry values reached £19,300/stocked hectare for the year ending 30 September 2021, up from just below £16,000/ha in the previous 12 months.

According to the 2021 UK Forest Market Report, produced by Tilhill Forestry and John Clegg & Co, the total value of the UK forestry market reached £200.4m, breaking the previous year’s record of £200.18m.

The report suggests that demand is being driven by high levels of interest from financial investors, commercial forestry buyers and new entrants to the market investing in natural capital.

See also: Forestry values near £25,000/ha in record-breaking year

The total area of forestry land traded was 10,400ha, down from 12,500ha in 2020. The average property size also decreased to 155ha for properties sold,  from an average of 206ha the previous year.

Sector breakdown

The three main markets covered in the report were commercial forestry, mixed woodland and planting land.

For commercial forestry, Scotland accounted for 76% of the market, while Wales and England made up for 22% and 2%, respectively.

The mixed woodland market increased in value, with sales in England – where the majority of these sales took place – averaging more than £15,000/ha. The market remains small, with just 1,023ha being sold.

Planting land sales averaged £8,500/ha in 2021, an increase of £2,300/ha on the previous year. The total area sold reached 6,480ha in 2021, up from 4,460ha in 2020. There is reportedly more investor interest in England and Wales at present due to woodland carbon guarantee schemes.

Industry views

At the release of the 23rd annual report on Tuesday 23 November, Peter Chappell, head of forestry investment at Tilhill, said: “The positive long-term outlook for timber values has buoyed confidence in how commercial forests can perform as an investment, and the wider benefits of trees and woodland to society and the environment are being increasingly recognised.

“The report also highlights how the trend of younger forests achieving the highest unit values has continued into 2021, which shows investor confidence in timber values.”

Edward Daniels, head of forestry at John Clegg & Co, said: “2020 was an extraordinary 12 months in the forestry sector, but 2021 has more than matched it. Timber prices have remained high, plantation values are breaking new records, and large institutional investors such as pension funds and other new entrants are allocating more capital to sustainable investments than ever before.”

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