Soaring demand for standing forests from investment funds has pushed the base price of mature, well-managed plantations to €7,000/ac.
However, more than €10,000/ac is being sought for top-class woodlands, as competition for ‘green assets’ intensifies.
The extent of investor activity was highlighted this week, when the Gresham House-managed Irish Strategic Forestry Fund (ISFF) confirmed that it had bought close to 13,000ac of mature and semi-mature forests over the past 18 months.
A spokesman for Gresham House stated that while acquisitions to-date have focused primarily on standing forests – with clear-fell operations having started on some sites – the €130m fund aims to ramp up purchases of bare land for planting.
Industry sources predict that ISFF and other institutional investors will be among the main contenders for two massive forestry portfolios, which are currently being sold.
Dublin-based estate agents Lisney are quoting a guide price of €7.5m, or €7,000/ac, for around 1,059ac (429ha), which is in 11 different sections.
Meanwhile, estate agents TWM are quoting in excess of €7m, or €10,600/ac, for a 660ac (267ha) portfolio of primarily forestry, although it includes 22ac of grazing ground.
The lands are spread across Dublin, Wicklow, Offaly, Cavan, Kilkenny and Cork. However, the portfolio is being sold as a single lot.
The sale is by bid process, with offers to be lodged with the agents by noon on Wednesday, 26 June.
Sitka spruce accounts for 77% of the plantings, with the yield class ranging from 20 to 30.
Michele Jackson of TWM confirmed that a “reasonable number of parties” have sought further information on the forestry portfolio.
“It’s an asset class that is attractive to a lot of people,” she said.
The Lisney portfolio is spread across 11 different locations, with the plantations ranging in size from 27ac to 241ac. Three of the plantations are in Wicklow, two in Kildare, with one each in Louth, Westmeath, Donegal, Galway, Cork and Waterford.
Cathal Daughton of Lisney said the forests have good access, with 18 different conifer and broadleaf species featuring in the plantations.
While institutional investors will be in the running for most of the sections, Daughton pointed out that the portfolio may be sold in lots, and that this has brought local investors into play.
“There’s good interest from all walks of life; ranging from companies to investment funds to individuals,” Daughton said.
The sale is by bid process. Bids must be lodged with the agent by noon on Thursday, 20 June.
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