Boom in demand
Scots rural estates bought to boost green credentials
Buyers are investing in assets such as forestry
Time was when companies and individuals bought Scottish rural estates to enjoy the great outdoors and pursue their interest in country sports.
Now they are driven by a desire to boost their green credentials.
Enquiries about country property doubled and funds made available rose by a quarter last year, according UK agent Savills.
Some of the demand is fuelled by a desire for pandemic-driven solitude but in the main it is those looking for ways to reduce their carbon footprint.
Evelyn Channing, Savills head of rural agency in Scotland, said: “We continue to receive our fair share of calls from buyers across the world looking to hole up in Scotland in splendid isolation.
“But becoming more prevalent are new entrants wishing to buy land, not for its amenity or sporting potential, but for its green credentials.
“The ESG (environmental, social and corporate governance) agenda is bringing buyers forward, from small Scottish businesses to large charities and investment companies.”
In particular, the continued focus on the climate crisis and the drive for net zero is fuelling a seemingly insatiable demand for land suitable for planting trees.
This is resulting in forestry investors offering up to three times more for land than the traditional agricultural buyer.
With international buyers severely restricted from viewing Scottish property, around 70% of the firm’s Scottish estate buyers last year were based in the UK.
Analysis of its data shows funds of almost £5 billion are currently chasing Scottish rural property, compared with just over £4bn at this point last year.
Only 23 rural estates changed hands in 2020 and about half of those were sold privately, without ever coming to the open market.
While this in line with the long term average, the total value of Scottish estates sold last year increased by 43% to £100 million, in part as a result of stronger demand.
Ms Channing added: “The forestry and planting land market is absolutely booming. My colleague Jamie Adamson and his specialist team are talking to several new funds in the market which, over the last 12 to 24 months, have been competing aggressively alongside larger, more established investors from all over Europe and beyond.”
Other buyers are looking to offset carbon emissions produced elsewhere, by purchasing natural capital.
According to Savills, their focus has been largely on planting land and established forests but also encompasses peat bogs which cover a large part of Scotland and until now were regarded as having minimal value.
Ms Channing said: “Scotland is one of the few remaining places in the world where green resources can be acquired on a meaningful scale. There is a lot of focus on addressing the climate crisis both at an individual level and from a national response. This will only grow over the next decade.
“Scottish estates have an expanding role to play and we anticipate significant diverse interest in the estates that we will be bringing forward to the market over the next 24 months.
“This was demonstrated last week by an extremely competitive closing date for an estate which we had been marketing quietly, exceeding not only our clients’ expectations but our own.
“There is a distinct imbalance between supply and demand, and as a result those that are electing to offer their estates for sale are benefitting significantly from the current market conditions.”