Carbon & forestry market opportunities

Carbon and forestry

The last 12 months has seen the further evolution of the market for forestry land and the emergence of a new sub-sector of the land market driven by carbon and environmental factors. Head of Rural & Agency George Hipwell explains the latest market developments and outlines the opportunities for landowners.

Davidson & Robertson have been involved in the purchase and sale of planting land for a number of years however activity in the last 24 months has significantly increased. The surge in demand for land which is able to be planted has seen prices rise quickly. Over the course of 2020 the emergence ‘Natural Capital’ and increasing awareness of the environmental targets set by Governments meant a broader spectrum of land became appealing to a more diverse portfolio of buyers. This meant constrained sites, subject to reduced plantable areas, increased acreage of deep peat or environmental designations were in higher demand and prices began to rise by late 2020.

In 2021 the demand for land which could be planted with commercial forestry or native broadleaf species, and which had areas of deep peat requiring restoration saw a marked increase. Classified as the Environmental Social Governance (ESG) market, it developed rapidly and by the end of the year planting land could attract prices from £3,000 per acre to in excess of £5,000 per acre depending on site-specific factors whilst peatland could achieve between £1,500 and £2,000 per acre. Often the land in question was extensive areas of upland farms which only a few years previously could have been valued as low as a tenth of these prices.

The driver for much of this comes from Government targets. The Scotticarbon and forestry - D&Rsh Government targeted planting 13,000 hectares of new woodland in 2021, rising to 18,000 hectares in 2024/25. In addition, the target to achieve net-zero carbon emissions by 2045, 5 years ahead of the UK Government, has seen both the development of the Peatland Carbon Code and Woodland Carbon Code, putting an economic value to sequestered carbon.

“These factors mean there is more than ever at stake for landowners and the value of good professional advice can be significant. Davidson & Robertson have been involved in assisting clients to realise the true value of their assets in a changing marketplace” commented George Hipwell. “I have been involved in a number of sales in the last year where we have been able to realise significantly increased value for sellers than they were initially offered. The value of that advice in some cases has been more than £1,000,000.”

One of the 2021 off-market sales returned an increase on a direct approach to the sellers by 58%. The Argyll & Bute site extended to just over 2,000 acres and was marketed to a select group of buyers in April with a deadline for offers in mid-May. The clients were delighted with the service.

“Straight away we were impressed by George’s professionalism, his knowledge of the industry and that initial meeting ended with us feeling we had met someone who was going to guide us expertly through quite a difficult path. George’s excellent communication, always being readily available at the end of the phone, meant we felt more than comfortable with the process that we needed to follow in order to successfully sell the farm for the best price. We found George to have a wide knowledge of the pros and cons of selling the farm, and all done expediently. Without a doubt we would recommend Davidson Robertson.” J & L Sinclair, Argyll & Bute

Davidson & Robertson’s expert team understand the market and can succinctly explain the opportunities in each scenario, a fact appreciated by our clients. We also understand that at times there is a desire for the process to be discrete and conduct most of our sales of planting land and ESG land privately.

“Our off-market sales process tenders the land to identified, active purchasers and the process is very streamlined. In some cases, the results have delivered increased sales receipts for clients of between 50% and, in one case, 260%.” added George. “As the results show, it really pays to seek professional advice.”

Should you be considering a sale of land suitable for planting, peatland, or land with environmental characteristics our dedicated sales team is on hand to provide the expert advice that will help you achieve your objectives. For a confidential, no-obligation discussion please contact George Hipwell or a member of the Sales Team on 0131 449 1155.

George Hipwell





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