Forestry land values predicted to rise 10pc

Finnish investor’s arrival will drive prices to €5,500/ac, say industry sources

A 10PC lift in the floor price of forestry land is anticipated following the entry of the Finnishbased investment firm Dasos Capital into the Irish market.

Industry sources and estate agents maintained that Dasos’s efforts to build a sizeable portfolio of Irish woodland over the next three years would drive competition for both bare land and semi-mature plantations, and prices would rise as a consequence.

Bare land for forestry generally makes between €4,000/ac and €5,000/ac, but prices are expected to jump by €500/ac to a top of €5,500/ac as the Finnish outfit compete for land.

Last week, it was announced that Dasos would head up a fund, which is backed by the European Investment Bank and the Irish Strategic Investment Fund, which aims to invest €112m in Irish forestry.

The fund intends to purchase and lease around 15,000ha of bare land and semi-mature plantations right across the country.

It has been suggested that Dasos would struggle to secure this area of ground given the existing level of competition for suitable land.

Roscommon auctioneer John Earley said he was already getting €5,000/ac for planting land but he predicted that prices would rise further if the push for forestry ground intensified.

“With €112m coming into the sector, the market can only get stronger. But it has to be the right quality of land, and the right size of property — 80ac or more,” he said.

It is understood that Dasos is being represented in Ireland by Green Belt, The Forestry Company and SWS Forestry.

The entry of Dasos has provoked a mixed reaction, with some in the forestry sector welcoming the move, while others have been critical of the Government’s decision to back the initiative.

Padraig Egan, general manager of SWS Forestry, said the Finnish company’s decision to invest in Ireland was good news for farmers with woodland on which some or all of the premiums have been drawn.

“Dasos will create a viable exit market for farmers with semi-mature plantations,” Mr Egan said.

“This will give a deserved payday for the pioneers of forestry in this country,” he added.

He said the development was also a positive one from a national perspective.

“Dasos will manage these private plantations in a professional manner, maximising their potential and thereby keeping sustainable forestry jobs in rural communities,” Mr Egan insisted.

‘Shortsighted’

However, Roscommon/Galway TD Michael Fitzmaurice lambasted the Government decision to facilitate the Dasos investment.

He described the initiative as a “shortsighted forestry plan” that would have a “detrimental effect on small farmers”.

“Encouraging the plantation of land will result in the widespread afforestation of rural regions. Farmers will find it almost impossible to complete for land holdings against these big multinationals. It will make farming an even more difficult venture for many smaller farmers and indeed younger farmers into the future and it is a short sighted policy by our Government and the EU,” Deputy Fitzmaurice said

“This policy means that our resources will be further denuded as big private companies come in buying up land for forestry to the detriment of local communities and farm families,” he added.

The west of Ireland TD said the farm organisations need to “wake up” to what was happening.