UK forestry now ripe for investment says industry report

Over £111 million of forestry property was sold in the past year, 40% more than in 2016, according to the latest annual UK Forest Market Report.

Image: John Clegg & Co / Tilhill Forestry
Image: John Clegg & Co / Tilhill Forestry

According to the report, prepared by Tilhill Forestry and forestry agent John Clegg & Co, the market has this year returned to growth after a quieter 2016, with 87 forest properties sold for a total of £111 million, compared to a five-year average of £104m a year.

In all, 17,272 hectares were traded, 78% of which were in Scotland, underlining its dominant position in the commercial forestry marketplace, with England accounting for 18% of the market and Wales just 4%.

The industry is providing investors with annualised returns of 10.7%, and continues to outperform most other asset classes, the report says, adding that it benefits from strong political support due to the industry’s economic contribution, green credentials, carbon sequestration and biodiversity.

Tilhill Forestry’s business development director Peter Whitfield says in the report: "We have been encouraged to see a steady flow of new investors into the market attracted by the good returns, the potential for tax planning and/or long-term capital growth, and frequently just a genuine enthusiasm for getting involved in forestry."

According to John Clegg & Co partner Fenning Welstead: "Large-scale commercial plantations have been in strong demand but the supply of such properties is decreasing. With some notable exceptions, none have been established for almost thirty years."

He adds: "There is a move towards exciting new afforestation programmes with positive support from grants and political will. Potentially, significant opportunity for afforestation may result either from existing farmland owners planting parts of their land, or from changed ownership to forestry investors."


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