Industry News

Forestry investment remains a top performer, says UK Forest Market Report 2018

The UK Forest Market Report 2018, launched in London, has revealed that patience and shrewd forestry investment choices have paid dividends over the last 12 months.

Many UK forest owners who purchased their property 30 or 40 years ago are now reaping exceptional rewards for patiently growing their timber assets. Not only is their investment showing returns of 13.9% per annum –  one of the best performing asset classes - but the price of standing timber has soared 30% in the last year alone.

The 20th edition of The UK Forest Market Report is produced by Tilhill Forestry and John Clegg & Co and provides analysis of this growth and further commentary about forestry as an investment choice. The report also features a study on the lowland woodland sector.

In discussing the performance of the commercial forestry market in the year to September 2018, the report describes a “brisk and robust” sector. A total of £104.2m of forest properties were traded in 2018. This is a 6% drop from 2017 but, interestingly, the market comprised a smaller number of higher value sales (57 in 2018 compared to 87 in 2017) with an average size of 196ha (149ha in 2017) and an average price of £1.83m (£1.28m in 2017). Scotland retained its dominant position in the marketplace with 69% of the sales recorded.

The report points out that standing timber prices have rocketed by around 30% over the last 12 months - great news for owners whose forests are now ready to harvest.

Additionally, despite political uncertainty, the report suggests that new agricultural policies may be on the horizon that will encourage a more integrated approach to land use particularly with forestry and farming.

The report says: “Overall we believe that the market continues to behave robustly in the light of the wider economic environment, demonstrating the strength and resilience of forestry as a long-term investment. New investors are coming through to investigate the marketplace with many of these based within the EU and reassuringly confident to invest in the UK.”

Peter Whitfield, Business Development Director for Tilhill Forestry, explains: “Motivations for investors vary but the main reasons are long-term financial returns, the potential for tax planning, long-term capital growth particularly within a pension, or the amenity value.

“The wider economic climate remains highly volatile but, in this environment, the security of owning real assets, the improvement in timber prices and general confidence that these can be sustained and strong political support for the industry together with the amenity values mean that forestry remains an attractive choice for many investors.”

Fenning Welstead, Director John Clegg & Co., said that the level of competition was “remarkable” and that the demand from investors seeking ownership of forestry assets has never been stronger in his experience.

He added: “The upward movement in the price of timber in the last 12 months has been staggering. It has been driven partly by the weak pound and more expensive imports but also, I believe, by the dawning realisation that the supply of fibre is finite.

“The UK is the second largest timber importer in the world. With more interest in forestry and the wide range of benefits forests offer, and an increase in planting, perhaps we can start to reduce the amount of timber we import.”

More conifers were planted in Scotland last year than in any year since 2000 and encouragingly, the report says, Forestry Commission Scotland has reported strong demand for woodland creation schemes for 2018/19 and 2019/20 with over 12,000ha being assessed - well exceeding their target of 10,000ha per year.

The forestry grant budget in Scotland has been increased for 2018/19 to accommodate the increased demand - a clear sign of how the Scottish Government perceives the importance of forestry as part of the rural economy.

The report welcomes this and other “very positive steps” taken in support of commercial afforestation such as the announcement of a Forestry Investment Zone in the north of England, the appointment of two Forestry Commission Woodland Creation Officers and the appointment of Sir William Worsley as the Tree Champion for England. Forestry also enjoyed a mention in the latest budget with £60 million of funding to be put in place for tree planting in England.

Another encouraging sign centres on the concept of Natural Capital which is at the heart of the UK’s 25 Year Environment Plan. It recognises that forestry is more than just an asset for timber extraction and offers much broader societal benefits such as cleaner air, flood reduction, carbon storage and health improvement.

For a copy of the Report please click here.

 

[News URL: http://cti-timber.org/content/forestry-investment-remains-top-performer-says-uk-forest-market-report-2018]

New glasshouse opens in Cheshire to boost timber production and help grow Public Forest Estate

On Friday 31st August, Environment Minister Thérèse Coffey MP opened a new glasshouse in Cheshire.

The glasshouse is intended to bring a boost to timber production and help to grow the Public Forest Estate. The state-of-the-art growing facility covers a hectare and has tight environmental controls, creating better growing conditions for the four million seedlings it will house.

The glasshouse will play a vital role in the maintenance and expansion of the Public Forest Estate throughout the UK, with the seedlings helping timber production and improving biosecurity. it will be fully stocked with a mix of species and ages by 2020.

Environment Minister Thérèse Coffey said at the opening: "It is wonderful to be here to officially open this impressive new structure which will help ensure our forests are stocked with trees in a more sustainable and productive fashion."

"The forests and woodlands that these trees will go on to be a part of are vital for providing timber, protecting wildlife, and helping us improve our environment for the next generation."

Simon Hodgson, Forestry Commission England, Chief Executive said: "The largest glasshouse dedicated to forest trees in the UK means that Forestry Commission England will be able to plant around five million of the very best trees every year in the nation’s forests for timber, recreation and wildlife as well as supplying trees to Scotland and Wales. We are increasing the diversity of tree species we plant so the nation’s forests are resilient; protecting them from pests, diseases and the effects of a changing climate."

[Source: www.gov.uk]

 

[News URL: http://cti-timber.org/content/new-glasshouse-opens-cheshire-boost-timber-production-and-help-grow-public-forest-estate]

China launches FSC National Forest Stewardship Standard

China is the second country in the Asia Pacific region to publish a national forest stewardship standard based on the latest version of the FSC Principles & Criteria.

China imports more wood than any other country in the world. The forests that are FSC-certified in the country are mainly for production and contain monoculture plantations such as poplar and eucalyptus trees with short rotation periods of five to seven years. There are also FSC-certified Chinese fir and pine trees with more extended rotation up to 25 years. In China on average smallholders manage about 2 hectares of forests, with some manage less than 0.1 hectares and some up to 160 hectares.

The new national standard set clear targets for forest managers towards sustainable intensification and proactive management of environmental values. Experts in natural conservation, worker's rights, forest carbon management, poverty alleviation, international trade, and law and legislation helped to write the standard.

Over 80 countries are working to transfer their national standards from version 4 of the Principles and Criteria to version 5. 70 countries are developing national-level standards around the world and usually include representation of social, environmental, and economic stakeholders. FSC-accredited certification bodies are developing interim national standards in countries where we don’t have an FSC representative.

The FSC National Forest Stewardship Standard of the People’s Republic of China can be downloaded here.

 

[News URL: http://cti-timber.org/content/china-launches-fsc-national-forest-stewardship-standard]

Timber Market undergoes biggest period of change in decades

Property Consultants Bidwells have released their Summer 2018 Timber Price Database which looks at the standing conifer timber prices achieved in the six months to September 2017, indicating the timber market has undergone perhaps the biggest period of change seen in decades.

Returns from 79 transactions totalling over 742,000 cubic metres of coniferous timber, with a value to the grower in excess of £28 Million have been received and indicate on average significant price rises over the period.

With Bidwell’s last commentary back in December 2017 stated that there were “current reports of supply shortages and increasing upwards pressure on standing sales values” – this has proved to be something of an understatement as the latest set of results for October 2017 – March 2018 had clearly demonstrated.

All signals are pointing towards prices of coniferous timber throughout Scotland & Northern England having continued to increase since the end of March and there are still considerable supply pressures on timber processors. 

Raymond Henderson, Forestry Partner at Bidwells commented: “It is always difficult to predict the future, given the influence which global demand and exchange rates have on domestic timber values, but the overall macro-economic situation of increasing demand and tightening supplies suggests no reason to suspect a weakening of prices over the short term."

“Good news for timber growers then, but possibly less so for many processors, and given the closely linked health dependence of each sector on the other, it can be in no-one’s best interests to see unsustainably high prices. The hope is therefore that what we have been seeing is a re-basing of timber values at levels which can be maintained in the long term.”

To view the full insights and research, please click on the report here

 

[News URL: http://cti-timber.org/content/timber-market-undergoes-biggest-period-change-decades]

PEFC launches 2018 photo contest to celebrate forests and wildlife

Following on from the successful 2017 competition, PEFC UK and PEFC Ireland have launched the 2018 photographic competition with the theme of Forests, our Home, Workplace and Playground.

The contest - to close on World Environment Day on 5th June - aims to highlight the importance of caring for our forests and why sustainable forest management and certification are such important element of this.

The PEFC is looking for exciting and inspiring images showing how people use the forests for a range of key reasons – from commercial purposes to relaxation as well as examples of how wildlife including birds, animals and insects rely on them for food and shelter.

There are three national cash prizes to be won and the winners will be announced by the end of June. The winning photos will then be entered into an international competition to find a worldwide winner and the chance to win a further special prize. 

Entrants are invited to submit their photographs through Instagram using the hashtag #forestplaywork. Further details and terms and conditions can be found at www.pefc.photo

 

[News URL: http://cti-timber.org/content/pefc-launches-2018-photo-contest-celebrate-forests-and-wildlife]

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