FORESTRY will continue to offer sound investment opportunities post Brexit, according to Scotland’s leading rural property consultancy.
CKD Galbraith, which advises clients on woodland management across Scotland, said that forestry would continue to offer stable investment platforms whilst more common investment routes are subject to continuing uncertainty.
With Scotland’s agricultural sector witnessing low commodity prices and falling subsidy payments, now is an optimum time for farmers and landowners to branch out and consider creating woodland on their land.
Woodland is a popular long-term investment opportunity given the high value of productive forestry land and strong timber prices. According to the Forestry Index, the returns from woodland have averaged around eight per cent for the past 20 years.
CKD Galbraith’s forestry department has advised a number of clients on land diversification and have witnessed a recent increase in demand from buyers seeking land for planting trees who recognise the investment potential.
At present there are government tax incentives and funding for commercial tree planting, a segment showing significant growth within the industry and it is also an activity that doesn’t require ongoing subsidies.
Given the significant political change, there has been a level of uncertainty within the sector regarding the future level of forestry grants - however, the Scottish Government remains fully committed to increasing woodland cover and the forestry sector as a whole.
The Scottish Government’s climate change advisory committee recently recommended increasing the target for creating new forests to 16,000 hectares a year. Creating modern forests is highly imperative in helping meet the country’s carbon reduction targets which aims to cut greenhouse gas emissions by 80 per cent by 2050.
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