The launch of the Irish Strategic Forestry Fund by Gresham House will inevitably inflate the base price for land, auctioneers have told the Irish Farmers Journal.
Roscommon-based property consultant John Earley predicted that entry of investment funds such as Gresham House into the land market could inflate the price of heavier ground from €6,500/ac to €7,000/ac up to €8,000/ac in some areas.
“This is going to push up demand and prices. It will bring in more competition for farms that are a step above forestry land, and you will see average prices increase as a result,” Earley said.
Stephen Barry of Raymond Potterton Auctioneers in Navan claimed that the statement by Gresham House has already had an impact.
“The statement of intent by Gresham House is likely to increase values even if they never buy an acre,” he said.
Marginal land, I believe, is already outperforming all land
“The ambition to acquire so much land, when viewed in the context of the small acreage that is offered for sale each year, gives you an idea of how extreme a target they have set themselves,” Barry pointed out.
“Marginal land, I believe, is already outperforming all land as farmers look for less productive lands to dilute nitrates and protect stocking rates. It’s quite an incredible and substantial entrance into an already hot market,” he added.
Tony Sweeney of DM Auctions in Leitrim agreed, although he maintained that the area getting the green light for planting will remain small.
“More customers will always help the price of land. But it remains very difficult to get permission for planting in Leitrim and the amount of land getting through [for forestry] is very limited as it takes two to three years,” he explained.
CEO, Western Forestry Co-op
“This is Government policy to meet afforestation targets at any cost; it is morally wrong and unfair to the Irish people. This will not add to the local community or the local economy, and further this will have a social impact through rural depopulation by outpricing local and new young farmers.”
“Coillte’s role in this is three-fold; namely, to acquire the land, plant the land and then manage the land as part of our existing forest estate. That is our role in this. The only way Coillte can get back into delivering the afforestation goals of the country and assisting in that is by drawing on third-party capital because the level of expenditure is extraordinary, at over €2bn.”
“This appears to me to be Leitrim on steroids. What happened in Leitrim was that private, non-domestic investors came in, bought up land and built resentment among local farmers who were priced out.”