A new report by Savills and Scottish Woodlands said more than 18,300 hectares of forestry were sold across Britain last year at a cumulative value of £83 million — with nearly 80% of sales taking place north of the Forth & Clyde Canal.
The proportion of forestry sold in North Scotland during 2016 doubled compared to 2015, with two large sales — The Barracks and Strathmore Forests — making a total of 7,246 hectares, which made up 40% of the wider UK market.
David Robertson, Investment & Business Development Manager at Scottish Woodlands said: “Government policy is increasingly focussed on the benefit of woodland.
“The Scottish Parliament has increased its tree planting target from 22 million to 33 million trees per year by 2025 …
“This equates to a rise from 10,000 to 15,000 hectares of forestry land, with grant funding bolstered from £36 (million) to £40 million in 2017-18.
“In addition, a £19 million Carbon Woodland Fund has been announced in England aimed at increasing planting of woodlands to contribute to the Westminster target of 11 million trees in the lifetime of the 2015-20 parliament.
“In summary, we are potentially witnessing the best period for forestry expansion since the 1970s and 80s, supported by government policy on both sides of the border.”
James Adamson, Savills’ Head of Forestry Investment UK said: “Investors are increasingly seeking multi-purpose investments, ones that hedge against uncertainty and provide a long term home for capital.
“Although UK timber markets will fluctuate from year-to-year, the prospect of a longer term upward trend in timber pricing structures is very real, making us confident in the future of forestry as an asset.
“The UK forestry market has continued to demonstrate strong performance and remains a highly desirable alternative asset class.
“High-yield class, well-managed commercial spruce forests with good access to timber markets will remain in strong demand, and offer an excellent long term investment option.
“Looking towards a post-Brexit-world, a revision of EU timber trade regulations could enable UK forest products to be used more widely in construction.
“Our research suggests plantation values will rise over the medium term, albeit at a slightly slower pace and we forecast 32% growth in forest values over the next five years, with scope for further growth if timber prices rise above expectation.”