Spotlight:
UK Forestry Market 2015

UK Forestry Market
Spotlight: UK Forestry Market

02 April 2015, by Savills Rural Research and Scottish Woodlands

A Complex and Unique Commodity
Scottish Woodlands and Savills have come together to offer a fresh perspective on the UK forestry investment market.

Forestry along with farmland has outperformed many other assets during the past 20 years. It offers a strong combination of benefits, being land-based, commodity-driven, tax efficient and often counter-cyclical to other investment products.

Its role as a credible investment alternative was clearly demonstrated against the backdrop of the 2008 financial crisis. It is testament to its strength that the industry fared well in comparison to other sectors, most of which were impacted over a longer period.

 

The forestry sector has witnessed many phases over the past 75 years from its importance as a major national natural resource, through a period of extensive new planting driven by tax mitigation, followed by a more recent focus on the conservation and biodiversity aspects of woodland.

Since the early 2000s, commercial timber forests have held a great attraction for many as investment assets and forestry is now increasingly being purchased as part of a diversified portfolio.

Multiple benefits

Forestry offers multiple benefits, from access and conservation through to the genuine enjoyment of ownership. However from an investment point of view, the sector is primarily about timber production and the demand from processors for raw materials. As the economy continues to recover and the construction sector grows, the future of this commodity looks very promising indeed.

In practical terms the volume of available forestry in GB is limited and, therefore, the likelihood is that a relatively small transactional market will continue to support and enhance capital values over the medium to longer term.

Coupled with the effects of market size, Great Britain has a world class wood processing sector that requires long term continuity of wood supply and there are already concerns in the industry over the future availability of timber.

Based on simple supply and demand economics it is difficult to forecast anything but positive future investment performance for the sector.

Articles from Spotlight: UK Forestry Market 2015

Forest Investment Analysis

The total value of forest transactions has increased significantly over the past five years.

Forestry vs Farmland and Other Assets

Forestry along with farmland has outperformed most other assets during the past 20 years.

Timber Age and Capital Values

It is important to fully understand the stage of the timber's growth at acquisition.

International Forestry

02 April 2015

International Forestry

The GB forest area is tiny when compared with other global locations.

The Outlook for Forestry Investment

Timber is set to become forestry's primary market driver.

 
 

Key contacts

Jonathan Henson

Jonathan Henson

Director
Estate Management

Savills Perth

+44 (0) 1738 477 511

 

Alastair Gemmell

Alastair Gemmell

Director
Land

Savills Perth

+44 (0) 1738 477 520

 

Ian Bailey

Ian Bailey

Director
Rural Research

Savills Margaret Street

+44 (0) 207 299 3099

 

Nicola Buckingham

Nicola Buckingham

Associate
Rural Research

Savills Margaret Street

 

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