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#Investments — 26.04.2016

Timber market in France: key figures

Benoît Lechenault

In a low interest rate environment, and thanks to its diversification and safe haven properties, forest land is still in demand, although prices are high, or even overvalued in terms of technical value in some cases.

The amount of forest land for sale is on the increase

Overall, the amount of forest land sold has increased over the last five years, including in the segment of forests covering an area greater than 100 hectares.


Prices vary according to segment

The market for forests covering more than 100 hectares represented 120 transactions in 2014, with 29,300 hectares sold, equivalent to around 26% of total sales, and less than 1% of total forest land.

Prices vary considerably, from €650/ha to more than €11,500/ha, which reflects marked differences in the type of property sold. The price of forest land depends on wood quality, surface area, location and ease of access to plots. The most expensive forests are in the Paris Basin (€10,000/ha upwards), western France (€5,000/ha) and eastern France (€4,500/ha). The cheapest forests are in the south of France.

We note an increasing trend for the highest quality and largest forests to attract a premium. Whereas the average price for forest land has settled at around €4,000/ha, prices in the 100 hectare-plus segment saw faster growth between 2013 and 2014. Since 1998, French forest land has increased in value by an average of 4-5% per year, while the CAC 40 – despite rising strongly in 2000-2008 –has gone up by only 3% per year over the same period.

 

Read our analysis presented as a detailed infographic on our Voice of Wealth app available from the App Store and Google Play