Central Scotland still leads UK forestry transactions

Savills has reported that Central Scotland continues to see the strongest market activity in UK forestry transactions.

However, the total value of the UK forestry investment market fell 68% in 2023 to just under £96 million.

Further, the total area of UK forestry traded fell 46% to 7,000 hectares in 2023 — significantly lower than the 10-year average of 18,000 hectares.

For the third year running in 2023, Central Scotland recorded the highest number of forest hectares sold across all UK regions.

However, for the first time since 2016, the annual average value of transactions in Central Scotland fell to £24,300 per productive hectare.

“2023 follows three years of exceptional growth in (UK) forestry transactions, culminating in a record-breaking year in 2022 when just over £300 million of UK forestry transacted,” said Savills.

“In contrast, the total value of the UK forestry investment market contracted by -68% to just under £96 million during 2023.

“According to our research, this is the lowest total value of commercial forestry sold since 2016, when the total value traded was £90.5 million …

“In line with the lower value of the market, for the third year in a row, the total area of forestry traded fell by -46% to 7,000 hectares in 2023, which is significantly lower than the ten-year average of around 18,000 hectares.”

Savills’ research on the UK commercial forestry market is based on its database of all forest sales over 50 hectares including off-market transactions it is aware of.

In North Scotland, Savills said that market activity in 2023 for commercial forestry “was so quiet it is impractical to analyse and report averages.”

Savills said: “However, although forestry values are generally lower in North Scotland, the average price achieved quadrupled between 2014 and 2022.”

South Scotland recorded 44% less commercial forestry hectares sold in 2023 compared to 2022. “This is, in part, due to the attractiveness of the region for forest ownership, with fewer properties trading because of the desire to hold assets here,” said Savills.

“Average productive values fell to around £26,000 per hectare.”

The number of forest hectares sold across England increased by 84% compared to 2022. However, the market for commercial forestry in England is small, and the average productive value of properties sold was slightly higher than 2022 at just under £28,000 per hectare.