Timber prices improve with the weather

As with many other sectors, the forestry property market has been affected by the increase in the cost of borrowing and the generally fragile wider economy, together with lower timber prices.

However, and in contrast to this not so happy message, in the last few weeks we have seen a very marked increase in calls and emails as investors and potential purchasers feel the return of the sun on their faces and want to look at and consider the available properties we are offering for investment.

In our long careers as forestry agents, we have seen downturns in the market before. Happily, the recent modest quieting has been fairly minor in comparison to that the private sector has the freedom to take advantage of. Our feeling is that this is clearly reflected by parcels of timber having been less speedy coming to the market in recent months.

More particularly in England and Wales, where there is massive variation in the stocking and quality of forest properties, each sector of this market is seeing something very different in its trading conditions. In this issue of the FTN Forestry Market Report we are more focused on Tustins’ core area within the southern half of the UK.

Larger Commercial Woods regularly come to the market in all regions of the country, and we have seen some of the best in the last three years. However, the tor has seen high prices being paid by larger corporate organisations. Private individuals have not been quite so keen especially now we have lower timber prices.

Agents are having to very carefully consider guide prices to reflect the commercial realities of the properties and create the competition which is so important to vendors. People are looking more carefully at the numbers, and sales are being slow to come to that moment when everyone wants to bid. This caution also results in people looking harder than previously at issues on the property which might lower returns or create problems for future ownership.

Of note has been the sale of Coed Glynclygyrogwen which, after a few months of marketing, has recently been agreed favourably from a guide price of £1,800,000 for 273 acres. In contrast, a more commercial block of 95 acres called Cwm Pydew on the edge of The Berwyn Mountains, closer to markets, sold almost immediately at a price nicely in excess of guide of £900,000, reminiscent continued on p46 continued from p44

We gather from other agents a similar situation was faced with the sale of the other two large properties sold in south Wales and Yorkshire. We have also seen the reemergence of the keen small commercial private investor with two other woods recently agreed at significantly better than guide prices for two relatively small woodlands: Gwernilla in Herefordshire, which was agreed at a figure significantly better than the guide of £70K for a very commercial 12 acres; and Perthybu in Mid Wales, agreed at a much better than guide price of £375,000 on 73 acres of semi commercial replanted conifers.

In contrast the less commercial sector is proving to be slower to recover. Timber prices are less important but the cost of borrowing and the fairly negative economic outlook are more significant. That said, sales of a number of less commercial blocks of woodland, where the amenity and non- timber benefits of owning a woodland appear to be important, have been agreed.

Examples of this would be Scratch- hmill Scar that was agreed in early May at more than the guide of £1.25m for 222 acres of principally Pine forest, along with a conservation woodland known as Allt Y Waun, which has been agreed just above a guide of £295,000 for 71 acres of naturally regenerated native woodland. Both very different woods but properties where timber prices are a little less significant than their pleasure of ownership.

In most years the appearance of bluebells and spring flowers, which have been plentiful this year, heralds the start of the selling season for broadleaved woods. The appearance of leaf, drier conditions in the woods, together with longer and warmer hours of daylight for viewing, contribute strongly to this. So far, by mid-May, there looks to be a good selection of woods coming to the market.

Tustins, one of the UKs leading and fully qualified woodland sales specialists are experts on the sale, valuation and acquisition of all types and sizes of woodland.