THE average price of commercial forestry on the market saw a 23 per cent rise over the previous year, according to the latest edition of a leading industry report.

Produced by Tilhill Forestry and John Clegg & Co, the UK Forest Market Report outlines a positive outlook for the “robust” market in its annual analysis and commentary on the forestry and woodland sector and highlights its “powerful attraction as an investment asset”.

Key findings of the report include a 23 per cent year-on-year rise in average forestry values to £11,478 per stocked hectare; and a 21 per cent increase in the total value of the forestry market, amounting to £126.5 million.

14,235 ha (gross) of forestry was traded in 2019 (81 forests), with Scotland holding the largest share of forestry market transactions -­ 78 per cent of recorded sales.

The average size of sold forestry property decreased to 136 ha, down from 196 ha in 2018.

The average cost was £1.56 million, with 69 per cent of properties selling above their guide price and 14 per cent of properties selling at more than 150 per cent over guide.

continued strength in the mixed woodlands market is also demonstrated in the report, which comprised 44 properties, representing about 2,250 acres offered with a total guide price of £9.252 million. The total selling price was £9.603 million, around 4 per cent over guide.

Peter Whitfield, business development director for Tilhill Forestry, said: “We have seen a continued upward trajectory in average forestry values, which rose by 23 per cent over the past year. However, it must be stressed this is a volatile figure which is in part a reflection of the excellent quality of the forests which came to the market this year.

“Deviations in the quality of properties sold distort the comparison and, if we were to compare like for like examples, we would probably see something closer to a 10-12 per cent rise. That said, there is clearly a genuinely strong uplift in the market.”

Fenning Welstead, director at John Clegg & Co, said: “Our report for 2019 shows that forests have continued to rise in value. With the softening of timber prices this year, it might be thought that forest property values should follow suit. This is not happening, and we believe that this is a direct reflection of the trend towards renewable resources and a move to a low carbon economy.

“We believe the rise in land values reflects a desire to have such a fundamental asset as part of an investment portfolio.  Ownership offers opportunities for alternative land uses; for example, renewable energy and commercial forestry crops are a popular blend. Additionally, with a potential carbon tax in development there is the possibility of an annual income for sequestering carbon.”