BNP Paribas uses cookies on this website. By continuing to use our website you accept the use of these cookies. Please see our cookies policy for more information and to learn how to block cookies from your computer. Blocking cookies may mean you experience reduced functionality or be prevented from using the website completely.

#Rural Estate — 25.07.2017

In A Low Interest Rate Environment, Forests Are Still Considered A Safe Haven Investment

Benoît Lechenault

The value of forest land remains uncorrelated to gross yields.

The amount of forest land sold is falling across all segments

The amount of forest land sold is falling in the small segment. But this is also true in the large segment (> 100 hectares) as supply is increasingly scarce.

Price varies according to segment

In 2015 the market for forests greater than 100 hectares represented 110 transactions for a total land area of 20,600 hectares, i.e. round 18.8% of sold land and less than 0.5% of the total forest land area. Prices varied considerably, reflecting a large diversity in the land sold and costing between €650/ha and more than €11,500/ha. The price of forests is influenced by several factors (quality of wood, land, location, ease of access). The most expensive forests are located in the Paris Basin (€10,000/ha or more), western France (€5,000/ha) and eastern France (€4,500/ha).

The cheapest forest areas are located in the south of France. The highest quality and largest forests continue to command a premium in a scarce market, while the average price for forest land is rising by 3% per year on average. Prices for forests larger than 100 hectares continue to the upside: over the last ten years, the price per hectare has increased by more than 5% per year.

 

For the in-depth analysis, read Agrifrance 2017's report