Forestry leaders must collaborate to improve public perception about the sector 

The UK Forest Market Report 2023 

Forestry leaders must band together to change public attitudes to spruce trees and commercial forestry, conference delegates heard at the launch of an industry report yesterday (22Nov). 

A Fall in Tree Planting

The call came as experts from Tilhill – the UK’s leading forestry services company – and specialist forestry agency GOLDCREST Land & Forestry Group highlighted the fall in tree planting in the past year at the launch of The UK Forest Market Report 2023.*  

The report is the most comprehensive publicly available year-on-year record of activity in the UK forestry sector.  

Report of The UK Forest Market Report 2023 at WWT London Wetland Centre

Just 13,000 hectares of trees were planted this year, a drop of 7%, and 43% of the national target of 30,000 hectares. While Scotland continued to lead the charge with 8,200 hectares planted – more than two thirds of which were conifers – this was a 27% drop from 10,400ha in 2022. Broadleaf planting amounted to 51% of all UK tree planting. 

Xander Mahony, head of forestry investment at Tilhill, said the industry needed to work together to change negative public perceptions about Sitka spruce, the workhorse of the timber industry. 

He likened it to previous farming campaigns raising awareness about where milk came from and said there was “a similar disconnect”.

“People want things made out of wood, wood looks nice, we have our buildings made out of CLT (cross-laminated timber) but they don’t connect that to growing good Sitka in plantations and so breaking through that communication barrier and making that connection is really important.  

“It is something we need to figure out because we sit here feeling like we’re doing something good for the world and getting punished for it and that’s not a pleasant position to be in. We need to band together and work out how to change that.” 

He said planting more trees provided a solution.

“I think it is because we have a deficit of trees in the UK and we are planting relatively little compared to what we already have. It’s as though we are fighting over the scraps with people looking at conifer plantations which are quite big in size and asking why they’re not native woodland. 

“The fact is we want both and if we were planting more trees and had an abundance of trees than perhaps the productive components wouldn’t seem so out of place.” 

Jon Lambert, partner at Goldcrest, told the conference that people shied away from change but that there was scope for more tree planting.

“There is undoubtedly more room for more trees and working with our politicians to provide financial reward for people planting trees is hugely important to the industry. There are many  opportunities out there if people want more timber.”  

The report found that commercial forestry values fell for the first time in almost a decade with a 10%-20% drop in the past year. 

The report said:

“Compared to the rampaging run of forestry as an asset class over the last 17 years, the lagging effect of economic turmoil from the mini budget, the war in Ukraine, and rising interest rates have softened market activity across the board in both afforestation and commercial/amenity woodlands.” 

While highlighting the enduring “resilience” of UK forestry, the continuing emergence of new investors and confidence in the long-term future of timber underpinned by the need to replace plastic, steel and concrete with sustainable forest products, the report found that supply tightened, prices dropped and buyers became increasingly selective in the last year. Additionally, demand for timber slowed sharply in the short-term leading to a dramatic reduction in processing volumes. 

UK Home Grown Timber and Wood products

2023 saw £212m of commercial forestry listings on the open market, up 9%, with two properties accounting for an “extraordinary” 70% of the total value listed for sale and Scotland enjoying a 91% market share. However, the number of listings fell 39% to just 35 properties. 

Mr Mahony said:

“This continues the £200m observed market size trend into a fourth year. The headline number however, is boosted by two huge assets (Griffin in Perthshire and Glen Shira in Argyll) and flatters a market that was otherwise unusually small.”  

Mr Lambert said that most properties brought to the market had still sold but that after a “staggering” run, pricing was down 10-20% depending on quality and location.

“Purchasers are generally more cautious than 12 or 18 months ago, leading to longer due diligence periods, an increased demand to rectify ‘blemishes’ before completion and a desire for higher yields.”

He highlighted a continuing demand for good quality planting land but said appropriate sites were hard to find. The total value of planting land listings amounted to £49.9m, down 24%.  

In Scotland, average prices for planting land suitable for commercial forestry dropped 22% from £12,800 per gross hectare to £9,900 per gross hectare “in the most significant development across all forest market data this year”.  

It was hoped, according to the report, that a “normalisation in commercial planting land prices in Scotland would spur much needed woodland creation, both commercial and native” going forward.  

The Edinburgh Launch Event 22nd November 2023 at The Signet Library

Notes to Editors:

*The period covered by the report is the 1st September 2022 to 31st August 2023. 

While this is the most comprehensive of UK forestry deals and listings, there are a number of off-market deals not captured in the analysis, meaning the market is slightly bigger than the figures listed here. 

Press Contacts 

Tilhill – Georgina Thomas: Email: marketingteam@tilhill.com

Goldcrest – Jo Lindsay: Email jolindsay@outlook.com / Tel 07801 373531 

The UK Forest Market Report 2023 

This report is a market commentary based on the deals and listings we have observed over the past twelve months. Our combined experience and market position ensure strong insight into trends, but there are a significant number of off-market transactions not captured in our analysis. Further, there is significant variation in the specific assets from year-to-year so while the information provided captures the direction of the market, care should be taken in comparisons of year-on-year results. Where the report refers to individual years (2023 etc.) the actual period covered is the 1st September to 31st August. 

Download the Report

The UK Forest Market Report produced annually provides an in-depth study of the UK commercial forestry and woodland investment market, from the perspective of both buyers and sellers. It has been produced since the late 1990s and is considered to be the most comprehensive publicly available record of forestry transactions in the UK.