The time is now – Unlocking commercial investments in Scottish forestry

Author: Gail Clarke, Associate, Murray Snell WS

 

Despite the ongoing economic impact of the lockdown restrictions across the UK, the forestry sector in Scotland remains strong. Investors are continuing to make mid- to long-term investments in woodlands, with premium land prices being met and projected future growth remaining optimistic.

Over the last 100 years, Scottish woodlands have increased from 5% to 18.5% total land cover and it is a sector that attracts significant support from government.

Earlier this month, the Scottish Government announced £150m of funding is to be made available as part of its natural economy investment drive to increase woodland creation by 50% by 2024 – undoubtedly a welcome boost for the sector.

Access – unlocking the value of forestry investment

However, whilst timber prices, underlying land values, the ability to diversify (particularly into renewables) and Government grants will be of paramount importance to investors and forestry advisers, a key concern of Rural Law solicitors remains the matter of access – only the correct access can unlock the value of a forestry investment.

Our team has worked with clients across the sector, including on the purchase of a large commercial forest where the sellers had no right to take felled timber across a three-metre stretch of private road – this was a huge issue given the significant value of our clients’ investment and projected returns on that investment.

In another case, a new access road to take timber out of a forest had been constructed by the seller – but this was in a completely different location to that which was specified in their title deeds, meaning any investment on that basis would have been worthless.

In a third case, our team was advised that the seller had “fully resolved” an access issue by putting title indemnity insurance in place – however, insurance against a third party preventing you from using an access for timber extraction is not an effective solution to the practical problem of not being able to extract timber to sell on the open market.

A lesson learnt

There is little doubt that investment in Scottish forestry remains attractive and can make good commercial sense, with high returns on investment and excellent tax incentives. However, investors need to be careful and make sure that they have all the necessary rights required to avoid potential future issues.

Murray Snell’s Estates, Forestry, Agricultural & Renewables team is highly experienced in dealing with purchases and sales of, and investments in, estates, farms and woodlands, and we act for both owners and occupiers of estates, agricultural properties and forests across Scotland.

If you would like to discuss your particular circumstances, please contact our experienced team.

 

Gail Clarke is an Associate and forestry specialist within Murray Snell’s Estates, Forestry, Agricultural & Rural team and can be contacted by e-mail or by telephone on 0131 625 6625.

Murray Snell WS is part of the MacRoberts Group.

Agriculture, Rural & Estates

Our dedicated team operates as Murray Snell WS, part of the MacRoberts Group, and advises on the purchase and sale of agricultural and rural property, forestry and estates.

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