Subscribe to our Construction Newsfeed
Uk Construction Directory
Search our 156,810 companies....

Construction News

06/12/2012

Forestry Continues To Deliver Strong Returns

While governments across the world struggled to stimulate their economies, the UK forestry market continued to deliver excellent returns, according to the Forest Market Report 2012 launched jointly by Savills and UPM Tilhill today in London on 27th November and in Edinburgh on 28th November.

Over the past 12 months a combination of strong demand, and the high quality and maturity of woodland on the market, resulted in an increase in the average sale price of 49% per stocked hectare.

Not only did the size of the market increase sharply last year, but it remained highly competitive. Sale prices consistently exceeded asking prices by an average of 32%.

An analysis of forestry sales reveals a growing appetite for larger blocks of land, and in this regard the market is now mirroring farmland.

The IPD UK Forestry Index shows a return of 34.8% for the year to December 2011 and the Forestry Commission indices show the coniferous standing timber sales price up by over 26% in the five years to September 2012.

Jonathan Henson of Savills said: "As we predicted last year, UK timber prices are not being supported by the exchange rate to the same extent they were in 2011. However, true to form, the sector has not been susceptible to short term fluctuations. In fact global economic woes have only served to highlight woodland as a sound medium to long-term investment and it has continued to out-perform most alternatives."

George McRobbie, Managing Director for UPM Tilhill, added: "Demand for timber has increased substantially in recent years alongside the variety of products produced from forests. The result is that investors not only appreciate the traditional timber production aspects of forests but also their wider credentials. For example, forests can be a source of sustainable bio energy, a green asset and a place to sequester carbon.
-- Advertisement --
hss



"It is also very pleasing and excellent news for investors that the market has remained strong and that the value of woodland has increased so dramatically. An increase of nearly 50% up to £6,920 per hectare is staggering. We believe the increase in values is being driven by strong investor confidence in the future prospects of timber as a commodity and as a safe, asset backed, investment. This is supported by the jump in value of the large properties."

While the long-term outlook for commercial woodlands looks promising, there is speculation in the shorter term that capital values may be peaking and an increase in the number of woodlands on the market in 2013 is likely. However this will be dictated by exchange rates, timber prices, the speed of our recovery from a period of recession, and the impact that this has on the construction sector.

The significant tax advantages derived from timber, including the potential to benefit from significant IHT savings and Capital Gains Tax exemption, are among the sector’s strengths. The future role that biomass is forecast to fulfil in helping to meet energy requirements also continues to increase investor confidence in forestry.

In addition, alternative income-generating activities such as leisure opportunities and renewable energy, in the form of hydro and wind, are being considered by investors.

Henson added: "There are modest signs of life within the development sector and as economies start to recover and construction activity increases, demand for timber, both as fuel and a material, can only grow.

"We anticipate that while the economy will remain lethargic throughout 2013, the interest in forestry will endure. Prices will remain steady as long as there is not a significant increase in supply. Against such a backdrop it will be essential for investors to obtain first class market knowledge if they are to move quickly when the right opportunity presents itself, and profit from trading in this dynamic sector."

Established more than 60 years ago, UPM Tilhill is a national company operating from a network of offices throughout the UK. It is the UK’s largest timber harvesting and forest management company.

UPM Tilhill is always pleased to hear from companies or individuals who are considering investing in forestry. The company’s team of Woodland Investment Advisers helps customers buy, sell, manage or harvest timber and get the best from their forest regardless of the size or location and offers a full acquisition service and a seedling to harvester management.

Latest Construction News

17/01/2025
Leeds Trinity University has officially opened its newly refurbished City Campus at 1 Trevelyan Square in Leeds. Completed by GRAHAM Interior Fit-Out, the transformation of the central Leeds site introduces state-of-the-art facilities designed to improve learning and collaborate with industry partn
17/01/2025
Trammell Crow Company (TCC) has secured planning permission for a Grade A logistics scheme in Heywood, Greater Manchester, following a successful planning appeal. The development will feature two state-of-the-art industrial and logistics buildings. One building will house two units measuring 4,796
17/01/2025
Poole-based developer AJC Group has celebrated a record-breaking 2024, delivering 100 affordable homes, a significant increase from the 72 units completed in the previous year. Since 2023, AJC Group has completed and handed over 172 affordable homes across five sites. In 2024 alone, the developer
17/01/2025
Plans for one of the most ambitious parks projects in London have taken a significant step forward, with Haringey Council securing nearly two additional acres of land around The Paddock nature reserve in Tottenham Hale. The agreement with Thames Water marks a major milestone in the transformation o
17/01/2025
Islington Council has unveiled two draft guidance documents aimed at helping residents, businesses, and developers combat climate change by making buildings more energy efficient and fostering a greener, healthier borough. The consultation seeks feedback on the draft Climate Action Supplementary Pl
17/01/2025
The City of Wolverhampton Council has unveiled a £98 million investment plan over the next five years to develop around 500 new homes across the city. The proposal, part of the Housing Revenue Account (HRA) Business Plan, received Cabinet approval this week and now moves to Full Council for final
17/01/2025
Croydon Council has announced a significant milestone in the redevelopment of the Purley Pool site, with revised proposals submitted for a new leisure centre, later living housing, and the regeneration of the surrounding area. A planning application for the site was initially submitted in 2024, pro
17/01/2025
The City of Wolverhampton Council has announced that demolition work has commenced on the New Park Village estate, marking the start of a major £40 million redevelopment project to transform outdated council housing. Contractor DSM Demolition has begun pulling down poor-quality bungalows on Valley
17/01/2025
Hillingdon Council has acquired 12 new homes at Carpenters Court in Uxbridge. Leader of Hillingdon Council, Cllr Ian Edwards and Cllr Steve Tuckwell, Cabinet Member for Planning, Housing and Growth, visited the site to officially mark the handover of the properties from local developer Kearns Devel
17/01/2025
Organisers of UK Construction Week (UKCW) have announced another major coup for the show's 10th anniversary year, with the news that UKCW London will be co-locating with the 14th edition of The Stone Show & Hard Surfaces, the principal industry event for surface design. Established 26 years ago, th
Think Construction Skills Ltd.T & D Glazing And Installation LimitedLakeside HireEfco UK LtdBRICOFLOR UKAqua Direct LtdStuart CanvasContainexNo Hydro123v Plc