In 2021, Average Forestry Values Increased By 21%.

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For the year ending 30 September 2021, forestry values increased to £19,300 per stocked hectare, up from slightly under £16,000 per hectare the previous year.

According to Tilhill Forestry and John Clegg & Co’s 2021 UK Forest Market Report, the total value of the UK forestry market reached £200.4 million, exceeding the previous year’s record of £200.18 million.

According to the report, strong levels of interest from financial investors, commercial forestry purchasers, and new entrants to the market investing in natural capital are driving demand.

The total forestry land exchanged was 10,400 hectares, down from 12,500 hectares in 2020. The average property size for properties sold also declined to 155ha, down from 206ha the previous year.

Breakdown by industry

Commercial forestry, mixed woodland, and planting land were the three main markets examined in the paper.

Scotland accounted for 76 percent of the commercial forestry market, with Wales and England accounting for 22 percent and 2%, respectively.

The value of the mixed woodland market increased, with sales in England – where the majority of these sales occurred – averaging more than £15,000 per hectare. The market is still modest, with only 1,023ha sold.

In 2021, planting land sales averaged £8,500/ha, up £2,300/ha from the previous year. In 2021, the total area sold was 6,480ha, up from 4,460ha in 2020. Due to woodland carbon assurance programmes, there is allegedly higher investment interest in England and Wales right now.

Perspectives from the industry

“The positive long-term outlook for timber values has buoyed confidence in how commercial forests can perform as an investment, and the wider benefits of trees and woodland to society and the environment are being increasingly recognised,” Peter Chappell, head of forestry investment at Tilhill, said at the release of the 23rd annual report on Tuesday, November 23.

“The analysis also illustrates how the trend of younger forests earning the greatest unit values has extended into 2021, demonstrating investor confidence in timber values,” according to the report.

“2020 was an incredible 12 months in the forestry business,” said Edward Daniels, head of forestry at John Clegg & Co. “But 2021 has more than matched that.” Plantation values are setting new records, and huge institutional investors like pension funds and other newcomers are allocating more resources to sustainable businesses than ever before.”

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