Key sectors show marked improvement

Renewed economic confidence certainly played a part as income on all key sectors in Scotland increased throughout the year.

23 January 2014, Words by Kenneth Munn

 
Commercial

Average income from all commercial sources on ‘All Estates’ rebounded in 2013 back to a similar figure recorded in 2010. In 2013 income from this sector represented 10% of gross income up from the 7% recorded in 2012.

This trend was similar in England. Evidence suggests that there has been more activity for commercial workspace on rural estates and it is anticipated that this trend will continue.

Similarly average income from commercial sources on ‘All Estates’ almost doubled in 2013 to £12 per acre (£30 per ha) back to levels recorded in 2010.

In 2013, average rental income from telecom masts fell by -15% to average £7,212 per mast. In England a similar trend was recorded although rental levels fell faster.

As well as reduced unit income, our research data suggests that the density of masts has fallen adding an additional pressure to the generation of income from this asset.

Leisure

Income from leisure activities amounted to £6.10 per acre (£15 per ha) in 2013, up 7.3% from 2012. However, it remains under pressure in contrast to the commercial sector and average leisure income represented 4.8% of gross income last year, considerably lower than the 8.7% recorded in 2010.

Again location is key and using English regional data to illustrate, the South West and South East of England recorded the highest levels of income from this sector at £7 per acre (£17 per ha) and £12 per acre (£30 per ha) respectively.

The prolonged weak economic climate has clearly had an effect on this sector. This is very evident in the key tourism area of the South West of England, where income from this sector is just a third of the £24 per acre (£57 per ha) that was recorded in 2009.

Woodland

In Scotland the average estate generated just under £5 per acre (£12 per ha) from woodland – no real change from 2012. This is in contrast to England where woodland makes no real contribution, in its own right, to gross income.

However, woodland is an important part of the estate structure/assets providing the opportunity for sporting and leisure activities.

Woodland/forestry is a resource which is worth more exploration as it represents around 14% of the area of the average Scottish estate. Potential opportunities might include renewable energy, woodland grants and leisure projects.

Sporting

Our survey shows that the average income, on lowland Scottish estates, from sporting sources is £3 per acre (£7 per ha) – similar to that recorded in 2012. However, our research shows that the range is diverse with some estates generating up to £11 per acre from sporting enterprises.

Renewable Energy

Renewable energy potentially offers estates an additional income stream, and this is the key driver on 80% of UK estates considering a project.

However, our survey results suggest that only 20% of estates have completed an audit to establish actual energy use, although 70% have assessed the renewable energy potential of their estate with another 12% planning to do so in 2013.

The main challenge in proceeding with a project (mentioned by 72% of respondents) is the capital cost/ availability of funds, with planning (22%) also being a significant hurdle.

 
 

Key Contacts

Ian Bailey

Ian Bailey

Director
Rural Research

Savills Margaret Street

+44 (0) 207 299 3099

 

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