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Forestry sales notch up Scottish record | Forestry sales notch up Scottish record |
(35 minutes later) | |
Forestry sales have reached a record £151m in Scotland, smashing the previous record by 50%. | 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. | 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. | 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 characterised by the number of high valudeals, with as many in the £2m-£5m range as in £100,001-£250,000. At the 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. | 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. | 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.” | “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 was 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.” | Sinden said: “If you want a long-term, green investment, then UK forestry is hard to beat.” |
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