Demand for Scottish land is anticipated to continue this year as its role in combatting climate change becomes increasingly valued by those striving to sequester carbon or offset unavoidable emissions, says Savills.
It estimates that a total of 28,500 acres, which were historically managed for and defined as traditional sporting estates, were sold last year as investments in natural capital.
This can be defined as the world’s stock of natural resources such as earth, air, water, soil and biodiversity to name just a few.
The number of estates sold for this stated purpose increased threefold from 2020 and accounted for over half of the total number of traditional sporting estates sold.
Evelyn Channing, Savills head of rural agency in Scotland, said the market for Scottish rural estates was always modest, in terms of transaction numbers, but it had been particularly active in recent months.
During the second half of 2021, some extraordinarily high prices had been reported, she said, including sales to well-funded parties buying primarily for environmental reasons.
“What we’re now seeing is a pro-active and growing pool of investment funds, institutions and individuals in the market for large land holdings on which to carry out woodland creation, peatland restoration and ecological restoration schemes.
“In addition, there are a growing number of existing Scottish landowners whose management objectives are environmentally or ecologically led," Ms Channing explained.
“Such deals illustrate the commitment of investors to deliver their ESG agendas: while some purchasers’ primary motivation may be to generate validated carbon credits, many of our buyers also perceive value in the co-benefits of investing in nature.
"For example improving water quality, or creating enhanced biodiversity - as well providing societal benefits such as providing public access to landscapes or creating rural jobs.”
According to Savills, the opportunity to create new woodlands on rural estates has proved to be the most significant factor in determining price.
Good quality land suited to commercial forestry planting now achieves £10,000 to £12,500/ha, and native woodlands from £4,000 to £7,000/ha.
The proportion of traditional sporting estate purchases among last year’s transactions may have reduced last year, but according to Savills, they remain an important element of the market.
Ms Channing explained that Scottish estates had long held appeal for the more traditional style of buyer.
"Whilst the purchase price of these may be considerably higher than a few years ago, the alternative longer term investment potential of some, given new and potentially growing environmental values, is providing greater comfort to such buyers.”
