Investment in UK woodland remains healthy, with adverse effects of recession countered by the retreat of capital from more volatile business areas and rising demand for wood-based biofuel.
According to the latest Forest Market Report from property services business Savills and forestry management operation UPM Tilhill, woodland investment in the last five years has yielded capital growth of 125-150% and plantation prices are up a further 10-20% in the last 12 months.
“It shows how woodlands are seen as safe havens in uncertain economic times,” said UPM Tilhills’ Simon Hart.
The construction downturn and resulting timber price falls have reduced demand for coniferous standing sales and softwood sawlogs. But the report says that the outlook for younger woodlands remains optimistic and the recession is offset by softwood import inflation due to the weak pound and continuing export demand for pulp wood.
Biofuel demand is giving the sector an added boost.
“Eighteen months ago no material from woodlands we manage went to wood energy,” said UPM Tilhill’s George McRobbie. “Last year it was 500,000 tonnes and next it will be over a million.”
