Bright future for forestry, SWL Director tells would-be investors
The Future of Forestry is bright, with very positive opportunities ahead - but challenges to be addressed too.
That was the view of Scottish Woodlands Ltd Director David Robertson, who took part in a webinar organised by accountants and business advisers Johnston Carmichael.
Well over 100 people attended the event, which examined why forestry is a positive option for investors - and can also make a significant contribution to the UK's environmental objectives.
Mr Robertson, Investment and Business Development Director, was joined by Alex Docherty, Head of Private Client Tax and Deputy Head of Rural at Johnston Carmichael.
Mr Robertson outlined the positive economic and environmental drivers for forestry in the UK, and especially Scotland where the 2019 Scottish Forestry Strategy mapped out an objective to increase forest cover from 18% to 21%.
The UK had lagged behind, but new Forestry Minister Trudy Harrison MP and Forestry Commission Chief Executive Richard Stanford were looking to move towards "action, not prevarication", Mr Roberston said.
He stressed that the UK was the world's second largest net importer of wood products (after China) and this had to change at a time when global demand for wood was soaring. The demand for home-grown wood was also rising on the back of targets to increase the amount of new homes built using timber frames from around 26% now to 40% by 2050.
Mr Robertson said that the forestry industry was looking to develop lower-grade land, not the best agricultural land that was used for crops. While hill farming on more marginal land faced very significant economic challenges, and opened up opportunities for forestry, Mr Roberston said foresters had to be mindful of the strong cultural ties to agricultural land - and of land use consultations which put a strong emphasis on how any new developments affect local communities.
He said that the value of freehold purchases of commercial forestry had increased by almost 25% per annum in the last 5 years and 15% per annum over the last decade. Although these levels of increase were unsustainable, he said the values were underpinned by rising timber prices which were still very strong and that in all likelihood values would continue to increase. Over a longer time frame of 25 years, forestry has delivered returns of investment of more than 9% - making it a very strong asset class for investors.
After the event, Mr Robertson said: "This was a very useful event which shows a high level of interest in forestry investment. There were some very good questions asked, and forestry is clearly an asset class of significant interest because the drivers for creating more forests are both environmentally and economically strong."
"Forestry is a truly sustainable investment. Growing and harvesting trees is vital if the UK is to achieve its net-zero ambitions - and investing in forestry can also deliver excellent returns. I enjoyed sharing a positive story with potential investors and we are already looking to arrange further events, this time in-person, with Johnston Carmichael”.
To watch the webinar, click here