Forestry sales have reached a record £151m in Scotland, smashing the previous record by 50%.
A report by the chartered surveyors and forestry agents John Clegg & Co said the current level of activity was 13 times the size of the market at the beginning of the millennium.
There has been a smooth rise in the market since 2010 with a dip in 2014 caused by the uncertainty from the referendum on Scottish independence. The vote led to delays in the conclusion of a number of significant deals, many of which slipped into 2015, boosting the most recent figure.
Scotland accounts for 77% of all UK commercial forestry transactions, with 2015 was characterised by the number of high valudeals, with as many in the £2-m to £5m range as in the £100,001 to £250,000 range. At the very top end there were five transactions of more than £5m and two of more than £10m.
There are several demand drivers for forest land, the report said, aside from the current timber price where there have been signs of weakness due to the strength of sterling.
The value of logs is expected to rise considerably in the medium to long term and there is the potential for woodland as an investment.
“As we seem to be in an era of low interest rates, possibly for some time to come, forestry looks to be a promising option for investment,” said Fenning Welstead, a partner at John Clegg. “With physical growth in a tangible asset forestry has much to commend it.”
Jason Sinden, head of investment and and property at Tilhill Forestry, a forest management company, said the UK market is beginning to interest institutional investors
, with timber seen as a versatile renewable material and a convenient source of energy The world’s largest timber consumer is the UK’s Drax power station.
Sinden said: “If you want a long-term, green investment, then UK forestry is hard to beat.”
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