Forest values reached £ 19,300 / hectare seeded for the year ending 30 September 2021, compared to just under £ 16,000 / ha in the previous 12 months.
According to 2021 UK Forest Market Report, produced by Tilhill Forestry and John Clegg & Co, the total value of the UK forestry market reached £ 200.4million, breaking the previous year’s record of £ 200.18million.
The report suggests that demand is being driven by high levels of interest from financial investors, buyers of commercial forest products, and new market entrants investing in natural capital.
The total area of forest land marketed was 10,400 ha, compared to 12,500 ha in 2020. The average property size also decreased to 155 ha for properties sold, compared to an average of 206 ha the previous year.
The three main markets covered by the report were commercial forestry, mixed forests and plantation land.
For commercial forestry, Scotland accounted for 76% of the market, while Wales and England accounted for 22% and 2% respectively.
The mixedwood market has grown in value, with sales in England – where the majority of these sales have taken place – averaging over £ 15,000 / ha. The market remains small, with only 1,023 ha sold.
Sales of plantation land averaged £ 8,500 / ha in 2021, an increase of £ 2,300 / ha from the previous year. The total area sold reached 6,480 ha in 2021, up from 4,460 ha in 2020. There is currently reportedly more investor interest in England and Wales due to forest carbon guarantee schemes.
Releasing the 23rd Annual Report on Tuesday 23 November, Peter Chappell, Head of Forest Investments at Tilhill, said: The broader benefits of trees and forests for society and the environment are increasingly being recognized.
“The report also highlights how the trend of young forests to achieve the highest unit values continued in 2021, showing investor confidence in timber values.”
Edward Daniels, Head of Forestry at John Clegg & Co, said: “2020 has been an extraordinary year in the forestry sector, but 2021 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 than ever to sustainable investments. “