As we have already noted, agriculture and residential lettings remain the bedrock of rural estates, delivering, on average, 70% of the gross income. However, commercial, leisure and renewable energy enterprises all make a significant contribution.

Income in these sectors, especially for trading rather than let enterprises, is more correlated to the general rather than the agricultural economy and requires different skills, input and buy-in from the owner to make a success of them.

We are witnessing an increased focus on alternative income streams by Scottish estates, although this has been an underlying trend during the past decade.

Economic pressure and the need to spread risk, especially with the uncertainties surrounding agricultural support, outcomes from Land Reform, and trade concerns around Brexit, are driving this.

^{Source: Savills Research} 

As commercial and leisure incomes have become more significant over the past seven years, we are now recording a similar pattern for renewable energy. Across Scottish estates, this now represents almost 7% of gross income, or almost £10 per acre (2017). However, for estates actively generating renewable energy, this increases to nearly £15 per acre.

The average estate has an income of £11,400 per mast derived from telecoms. Unfortunately, this income is now under threat from the new Digital Economy Act and owners need to take action to protect this income.

Woodland, minerals and other income sources can also provide opportunities.

Our estate benchmarking survey shows that trading enterprises are more prevalent on Scottish estates, where the five-year average of trading income represented 18% of gross income compared with 8% on English estates. Much of this increased trading income is derived from the shift to in-hand contract farming and to new alternative enterprises.

In addition, our research shows that around one-third of farms and estates have holiday accommodation, including caravans, camping and glamping. A similar proportion open their house or garden, 25% host weddings and receptions, and more than 10% operate a farm shop. Other popular choices include cafes and restaurants, filming and photography, and corporate events.

The majority (70%) currently have trading incomes below £100,000. Of these, 16% are in the start-up stage, 17% have been trading for less than three years, while the remaining two-thirds are mature businesses.

Our survey shows that some of these enterprises have grown significantly; 20% had incomes between £100,000 and £500,000 and the remaining 10% were turning over more than £1 million per year.

^{Source: Savills Research}

Glossary and footnotes

This publication

This benchmarking survey was published in November 2017. The data used in the charts and tables is the latest available at the time of going to press. Sources are included for all the charts and tables. We have used a standard set of notes and abbreviations throughout this publication.

Review

We regularly review our survey data which means the data published each year may not exactly match that published in the previous year’s survey. Separate results are published for English estates.

Estate structure

The average estate structure for those estates participating in the survey is:

■ 3,800 acres

■ 44 residential properties with an average density of 8 houses per 1,000 acres

■ 16,300 sq ft of commercial workspace with an average density of 2,400 sq ft per 1,000 acres.

Ownership objectives

Long-term retention of the core estate is the key objective for the owners of these rural estates followed closely by income generation. Then followed by return on capital and environmental stewardship.

Abbreviations

LDT – Limited Duration Tenancy

SAT – Short Assured Tenancy

SLDT – Short Limited Duration Tenancy

Additional services

In addition to this report, we can provide further analysis, such as the provision of supplementary benchmark comparisons, portfolio analysis and/or interpretation and presentation of results.

For estates using Key Accounts and/or Key Property software from Landmark Systems there is a manual to help download data for the Savills Estate Benchmarking Survey.