Tuesday, 19 November 2013 10:42

Most active year yet for Forestry

upm logoSavills UPM Tilhill Forest Market Report launches today

This year’s Forest Market Report, launched jointly by Savills and UPM Tilhill in London today (Monday 18th November and in Edinburgh on 19th November), states that the UK’s forest market has never been more active than in the last twelve months, with Scottish sales leading the way and significant growth in Wales. 

Fifty per cent more forestry property was traded in the last year compared to 2012, to the value of £97.3 million, 8.5 times the value traded in 2000. This made 2013 a record year, both in the total value of the market and its unit price.

As in the past, most of the sales were in Scotland (68.9% by value) but there was a significant increase in Wales this year with 16% of sales taking place there compared to just 4% in 2012.

Also at record levels is the average value per stocked hectare which is now at £7,057. This has given an annualised average growth since 2002 of 15.4%. The average value of a property is up 29% on 2012 values to £1,231,000.


Jonathan Henson of Savills said: “While values of properties larger than 50 hectares have dropped in England, prices in Wales are now outperforming English prices for the first time.

“As the year progressed, an improvement in the economy led to early signs of growth in the sector.  This was strongly supported by a number of forestry investment funds and high net worth individuals who have been active at the top end.  Both sectors of the market have been aggressively bidding for good quality spruce forests which offer reasonable scale and access to timber markets.”

Mr Henson went on to say that, at the start of the global financial crisis back in 2007, few people would have been bold enough to predict the extraordinary performance of the UK forestry sector which, according to the IPD UK Forestry Index, is showing an annualised total return of 17.7% over the past five years and 16.3% over the past decade. 

George McRobbie Managing Director of UPM Tilhill added: “All in all it has been another tremendous year for forestry property market. The 50% increase in the value of commercial properties traded in England, Scotland and Wales compared to last year is staggering and proves there is huge interest from investors and private individuals who recognise the value and potential benefits of owning forests.

“We are now looking forward to an increase in demand for timber for construction and biomass and the knock-one effect on timber sales particularly from those with a combination of processing and energy needs.”

Mr Henson went on to explain that the rapid rise in the capital values of woodlands was initially driven by investors seeking a secure asset in which to shelter cash. The potential tax reliefs, coupled with a surge in interest in renewable energy opportunities and long-term optimism in timber prices, fuelled interest in the sector. Existing investors looking to increase their woodland holdings, new investors entering the market for the first time, and large forestry investment funds acting for pools of investors, all led to a surge in demand. 

He said: “As the wider economy continues to recover, alternative asset classes (such as equities, residential and commercial property) may become relatively attractive, and the number of private investors entering the market may peak in the short term. Overall we continue to be optimistic about timber prices.  The significant tax advantages derived from commercial forestry, including the potential to benefit from significant IHTsavings and Capital Gains Tax exemption, continues to point to a bright long term future for forestry.

The report praises initiatives like ‘Grown in Britain’ which have been very positive for the forestry industry in promoting the array of quality products generated from productive woodlands. It has already secured long-term commitments from over 30 UK companies in the retail, DIY, builders’ merchants, building contractors and building sectors to preferentially procure products from UK woodlands and forests. The total buying power of these companies is in excess of £50bn per annum.

Additional Info

For a full copy of the Forest Market Report 2011 log on to www.upm-tilhill.com or www.savills.co.uk

The UPM Tilhill and Savills Forest Market Report records some 1,288 transactions from October 1997 to September 2013.

The properties are over 20 hectares in size and are predominantly conifer.

Data includes crop ages and yield classes (estimated) for the primary productive species.

This report includes publicly recorded sales and, where possible, off market sales. Off market sales are difficult to quantify accurately due to their unpublicised nature and could add significantly to the total market value.

The area referred to is not the gross total area but the stocked area, i.e. the net productive area which is carrying a crop. Unplanted land or ground for replanting is excluded. By analysing the stocked area we are focusing on the productive commercial elements of the properties in line with the overall intention of this report. The transaction date used is that on which the legal liability is estimated to have transferred.


UPM Tilhill is always pleased to hear from companies or individuals who are considering investing in forestry. The company’s team of Woodland Investment Advisers helps customers buy, sell, manage or harvest timber and get the best from their forest regardless of the size or location and offers a full acquisition service and a seedling to harvester management.

UPM Tilhill, established more than 60 years ago, is a national company operating from a network of offices throughout the UK. It is the UK’s largest forest management and timber harvesting company.

As a leading rural property specialist, Savills handles the sale of commercial woodlands and advises on maximising returns from forestry investments throughout the UK. Our rural team help farm, estate and forestry owners realise the potential of their assets through diversification into a wide range of activities including renewable energy, leisure and sporting pursuits.

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