Commercial forestry values have escalated by at least 15% in the past year, according to a new industry report produced by Tilhill.
The UK Forest Market Report 2022 has estimated that the market is worth well over £200 million.
Increasing demand for timber assets driven by net-zero ambitions contributed to rising prices in a market characterised by fewer, smaller, but higher-value sales in 2022.
Meanwhile, the land available for natural capital projects, including native afforestation, peatland restoration and rewilding, also trebled over the past year, led by England.
Greater awareness of the benefits of broader natural capital increased interest in opportunities offering wetland, islands and other diversity, the report said.
The focus on nature-based solutions beyond timber revealed far more land suitable for these projects, rising to £80.7 million (from £26.4 million in 2021) based on the data monitored.
England accounted for the largest market share with £32.4 million of listings for 2,500ha of total land area, followed by Wales (£28.9 million for 2,100ha) and Scotland (£19. million across 2,300ha).
These listings averaged, per gross hectare, £13,200 in England, £13,600 in Wales and £8,500 in Scotland.
In the report, Xander Mahony, head of forestry investment at Tilhill, said:
“Commercial forestry values continue to be driven by increasing demand from institutional investors facing constrained supply.
“This year in particular has seen supply at the bottom end of the historical range.”
He said yield class was the biggest indicator of per hectare values, demonstrating a market that was willing to pay a premium for the best assets.
The mixed woodland market – driven by amenity and desirability over economics – grew by 81% in value from £10.7 million to £19.4 million and in size by 760ac, with increasing demand outstripping supply.
The report found planting land transactions rose by almost a quarter (23%) from £53.1 million to £65.3 million, with an average cost of £16,475/plantable hectare, up 50% on last year’s £11,000.
Scotland led the way with 85% of the value of plantable land sold north of the border as well as a 73% increase in average price to £17,200/hectare.
According to Tilhill, a few unique outliers skewed the numbers higher compared to previous years, but the trajectory was still upwards.
The total land planted in the UK rose by 4% (13,850ha) with broadleaves overtaking conifers for the first time since 2016.
76% of all new planting – and 93% of total conifer planting – took place in Scotland although at 10,480ha it was still below annual planting targets of 12,000ha.
