The forestry market has had an "astonishing year" with competitive bidding seeing average values rise significantly and the total value of the forestry investment market reach record levels, according to the latest edition of the UK Forest Market Report.

The 22nd edition of the annual report, produced by Tilhill and John Clegg & Co, highlights that the forestry and woodland sector has a very positive outlook.

The report shows that in 2020 a total of £200.18 million of forestry properties traded, the highest value traded on record, with the average cost of a forest property more than doubling from £1.56 million in 2019 to £3.28 million in 2020.

Key findings include:

  • 39% increase in forestry values from £11,749 per stocked hectare in 2019 to £15,962 per stocked hectare in 2020;
  • 58% increase in total value of forestry market from £126.5 million in 2019 to £200.18 million in 2020;
  • 16,595ha (gross) of forestry traded in 2020 (61 forests);
  • Increase in average size of a property sold from 136ha in 2019 to 206ha this year;
  • Scotland provided the largest share of commercial forest market at 69% by value;
  • England shows welcome increase in planting with 2,330ha, up from 1,420ha last year;
  • Wales planted 80ha, the lowest annual figure seen in 50 years.

Bruce Richardson, head of investment and property, Tilhill, said:

We have seen a truly astonishing year for forestry values. Despite the problems with the Covid-19 related restrictions, the UK forestry market has performed robustly through 2020, producing record results in scale and unit prices rising by 39% over the past year.

"The market in 2020 has been very competitive. This year most properties were sold above guide price.

"The most striking story this year has been the level of interest shown in younger restock sites as opposed to the more mature forests.

The younger forests are attracting higher unit prices per ha partly because the 2020 market included some very high-quality younger forestry in prime locations.

"We believe these prices show investor confidence in the future of the timber market, based on evidence that the improved varieties of spruce, a result of many years of genetic research, planted in recent years are performing as forecast with improved yield and form," he concluded.