We have looked at the regionalisation of value and the reasons behind this. The core investment attributes of good physical conditions, timber stock and quality, access and timber markets all come together to make south Scotland, North England and parts of Wales the most valuable regions, but there are good investment forests around much of Great Britain.

Investor preference remains prime Sitka Spruce in these core regions, but the changing dynamic in timber marketing brought about by woodfuel is providing stimulus to forest blocks that would otherwise look unappealing. The problem remains the location of end users and until a more regional distribution of small to medium scale biomass markets comes on stream, any investor benefit in marginal forests will remain limited.

At this stage we can still see a clear separation between prices for different grades of timber, with sawlog (construction) grade ultimately the most valuable. This means that forests with high volumes of sawlog timber remain the most valuable and ultimately we consider this will remain the case for prime forest assets, with growers rewarded over the long term for practising proper silviculture with the objective of maximising sawlog return.

There is also keen interest in forest renewables, particularly wind and hydro electricity developments. Undoubtedly, such development projects have the ability to generate one thing that most pure forest investments cannot, which is an annual cashflow. But the opportunity is limited and especially in the case of wind energy, the market is now sufficiently mature to make new opportunities less frequent.

Taking all factors into account it is possible to define the outlook for forestry investment in one word: timber.