Spotlight: UK Forestry Market

Forestry Investment Report
 
Timber Age and Capital Values

02 April 2015, by Savills Rural Research | @SavillsRuralUK

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

There is a strong relationship between the age of timber and freehold capital values. Figure 1 shows the rise in average capital value per hectare for a typical south Scotland Sitka Spruce forest, with the appropriate crop rotation stage annotated below.

Forest values are dynamic, rising until harvest, and then resetting as the next rotation is replanted and grows up again. The stage of growth at acquisition and change of average age profile going forward must be understood when appraising investments.

Click image below to enlarge

 

FIGURE 1

Prime Sitka Spruce: Value by Crop Age

 
Figure 1

Source: Scottish Woodlands and Savills Research

 

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