The sale price of standing forests has jumped by 20-25% over the last two years amid growing demand for ‘green and renewable’ investments.
Premium prices are also being offered for bare land that has been approved for planting, with the value of this ground reaching €7,000-€8,000/ac.
Strong competition between forestry and pension funds, private companies and individual investors is pushing up prices for semi-mature plantations and mature woodlands.
Good-quality semi-mature stands of Sitka spruce that are 15-20 years old are generally making between €6,000/ac and €10,000/ac, depending on scale, productivity and access.
John Roche of Arbor Forest Management said well-managed stands of mature Sitka spruce are in strong demand and making up to €9,000-10,000/ac.
“The closer to clear-fell the more the forest is worth,” he explained.
However, Roche pointed out that the top prices were only available for the better forests, with sale values for plantations on exposed or infertile sites falling back to €3,000-4,000/ac.
Access was another key factor in determining the value of forests. A premium was being paid for plantations with good road access, Roche maintained.
Although some institutional investors had purchased broadleaf plantations, Roche said this end of the market is generally “smaller and much weaker”, with indicative prices ranging from €2,000/ac to €4,000/ac.
Arbor has also handled the sale of ground which was clear-felled and marked for reafforestation. These lands are generally making €2,000-€2,500/ac.
Regarding the market for bare land, Roche said there was good demand for holdings that have been approved for planting.
While it is difficult to put a value on these properties, as there are so few of them coming on the market, he said €7,000-8,000/ac was the general guide for decent-sized blocks.
Roche predicted that the market for semi-mature forestry plantations will hold, given the current level of interest.
“Forestry as an investment is green and popular,” he said.
Lorraine Woulfe of Naas-based Tradeforus Forestry agreed. She said sales through the platform last year reached €3.5m.
“There is particular demand for certified and managed forests. More recently, the third quarter of 2023 saw peak prices in sales, which was maintained in the fourth quarter and has continued into the early part of 2024,” Woulfe said.
The high price of timber is also helping to drive on the market, Woulfe added, pointing out that demand for good quality timber is “at an all-time high”.