About Us

UK commercial forestry is a highly tax efficient sustainable real asset that diversifies an investment portfolio and provides exposure to timber prices, which are forecast to rise.

In May 2018, Gresham House acquired 100% of FIM Services Limited, resulting in the creation of UK’s largest commercial forestry investment manager, harvesting c.10% of the UK’s total softwood annually. Gresham House currently manages nearly 130,000 hectares of forests on behalf of institutions, endowments, family offices and private investors.

Forestry investment offers attractive long-term returns, through a combination of our forestry asset management expertise and the robust underlying characteristics of the asset class.

Why invest in forestry?

Forestry is a proven asset class for institutional and private investors. The combination of value in a naturally growing commodity and the security of ownership of the underlying land provides investors with income and long term capital appreciation in a sustainable and tax efficient manner. Negative correlation with more mainstream assets classes ensures that forestry diversifies a portfolio whilst reducing volatility.

UK forestry has provided excellent returns, as shown by the independent IPD UK Annual Forestry Index, the latest version of which can be downloaded here.

Average annual returns from the IPD UK Annual Forestry Index during the past 25 years have been 9.2%, which compares favourably with more mainstream asset classes, even before taking into account forestry’s significant tax advantages. Returns have been driven by both increasing timber prices and rising land values. Historical performance is no guarantee of future performance.

Timber prices are the key driver of returns. These are expected to increase in the medium/long term, driven by recovering demand in the developed world due to increased house building (and the use of more timber per build) and increasing demand in the developing world (as a result of both urbanisation and the strong correlation between GDP per capita and timber consumption per capita).

Globally, sustainable certified timber is increasingly demanded, shifting supply from natural forests to plantations in developed regions, which are a limited resource.

Gresham House expects timber prices to rise faster than the growth in consumption, as increasing pressure is placed on a largely fixed supply.

An increase in timber prices feeds through to higher land values, as the land becomes more economically productive.

Alternative uses for the land, including agriculture, sporting, leisure and conservation, combined with a finite resource, are likely to see land values rise over time. Gresham House constantly looks to add value through other income generating sources, to improve returns to our clients.

Investors have the option to select the appropriate age class property to suit their requirements for income or capital growth over a specified timespan and to manage or liquidate the portfolio in response to market movements or cash flow requirements. Gresham House is able to access both on and off market opportunities to meet investors’ requirements.

UK Forestry Investment Fundamentals 

Forestry investment returns benefit from multiple drivers

Forestry investment, as managed by Gresham House, comprises the ownership of freehold or leasehold land with a growing crop of timber. Forests are managed to maximise the crop yield, whilst minimising the risks for the owner.

Value is realised through:

  • A sale of the crop (harvesting) or by disposing of the asset

Returns from forestry are driven by three component parts:

  • Biological growth of the crop
  • Increases in the value of timber
  • Increases in the value of land

Gresham House also seeks to enhance returns from ‘higher and better uses’, such as wind farm development and other activities that provide the owner with additional income.

What returns have been achieved?

UK forestry has a demonstrable track record of exceptionally strong returns, with low volatility over the long term.

Source: MSCI, JP Morgan, Forestry Commission IPD UK Annual Property & Forestry Indices. Annualised rates, Total Return, as at 31 December 2017. *IPD UK Forestry Index created in 1992 – 25 years ago.

Forestry provides effective diversification from traditional asset classes

Source: Gresham House Forestry using Bloomberg data. IPD UK Forestry and IPD UK Property Indices, MSCI World / Emerging Markets Indices, FTSE All Share Index, FTSE AIM Index, UK Gilts, UK Inflation, PIMCO Global Bond and NCREIF US Timberland Index

UK forestry is positively correlated to UK inflation over the long term and has very low or no correlation to mainstream asset classes, providing an effective portfolio diversifier.

Demand for UK timber is on the rise

Source: FC Forestry statistics 2018

The UK is a captive market for timber, importing c.80% of its annual timber consumption (the UK is the world’s third largest market for timber products, importing £5.9bn per annum).

Significant tax benefits

There are several tax benefits associated with investing in UK forestry for UK residents:

  • Tax free income – Proceeds from UK timber sales are tax-free, whether the asset is held personally or by a company
  • Tax free capital gains – Increase in value of standing timber is exempt from capital gains tax (excluding increase in underlying land values
  • Capital gains roll-over – Proceeds from the sale of capital assets can be reinvested in UK commercial forestry land to defer the capital gains
  • No Inheritance tax – Qualifies for business property relief after two years of ownership

Gresham House does not provide taxation advice. Prospective investors are advised to consult their own professional advisers in relation to the financial, legal, tax, National Insurance Contribution liabilities and other implications of investment in forestry, which will vary in relation to their own particular circumstances.

Investing in forestry through Gresham House ensures access to a sustainable and socially responsible investment

Environmental, social and governance (ESG) credentials include:

  • Carbon capture – trees absorb and lock-in CO2 from the atmosphere. Through reduced deforestation, active forest management and more afforestation, global forestry could help to significantly reduce the impact of global emissions
  • Sustainable industry – as forests are harvested, the trees are replanted to begin the next forest cycle
  • Supporting biodiversity – forests provide sheltered habitats for wildlife, often supporting endangered species
  • Regulating water supply and quality – forests nurture the soils that are key to water retention, filtering and quality



Gresham House Timber Index

The Gresham House Timber Index provides investors with information on what direction timber prices have gone historically. It uses statistics published by the Forestry Commission (FC), and combines standing conifer timber sales and all softwood sawlogs sold on the FC estate. The conifer timber sales comprise an equal weighting of the Coniferous Standing Sales Price Index (CSSPI), being the average price of standing conifer timber sales, and the Softwood Sawlog Price Index (SSPI), being the average price of all softwood sawlogs sold on the FC estate.

The CSSPI includes all FC standing sales for all sizes of timber and all species. It will show most growth when demand for small roundwood is strongest, as the average tree size harvested is generally small in relation to highly productive Sitka spruce at the time of felling.

The SSPI includes all FC roadside sawlog sales. Felling of high yield class Sitka spruce will produce a high percentage of sawlogs in the product mix. Including the SSPI in the Gresham House Timber Index is thus representative of the crop being harvested from clients’ forests. It will show most growth when demand for sawlogs is strongest and is thus a balance to the weighting of the CSSPI in the Gresham House Timber Index.

The Gresham House Timber Index showed strong growth, increasing 40.3% over the year to September 2018, and 20.0% over the six-month period to September 2018.

These changes are yet to be reflected in asset values, which also continue to rise. The latest IPD UK Annual Forestry Index results for the year ending 31 December 2017 showed a total return of 13.9% per annum. The longer term 25-year annualised return has been 9.2%.

How to Invest in Forestry

1. Via a timber fund
Our timber funds are unregulated collective investment schemes (UCIS) and as such, they are subject to restrictions on promotion to investors. Please contact Anthony Crosbie Dawson on +44 (0)1451 843 096 or a.crosbiedawson@greshamhouse.com to discuss options for investing into a fund.

In order to be provided with information in relation to such funds you must be either:

  • An investment professional authorised to advise on UCIS; or
  • A person who has completed the Client Financial Information Form (“CFIF”) and has been assessed by Gresham House as being suitable and appropriate to invest in the fund due to being either a Certified High Net Worth Investor or a Self-Certified Sophisticated Investor; or
  • A person who is a Certified Sophisticated Investor; or
  • An Eligible Counterparty or Professional Client as set out in the FCA Handbook.

2. Direct Ownership
Gresham House facilitates direct investments in forest properties, which can be targeted to match an investor’s specific requirements. Direct investments into mature forests provide tax free income from harvesting in the short to medium term, whilst long term capital growth can be achieved through the acquisition of younger crops or bare land for afforestation. Large scale forest assets generally provide the opportunity for both income and capital growth. Please refer to this link for more information on current direct investment opportunities.

  • Ability to generate tax free returns in any timespan from 1 to 35+ years
  • Planned to meet known future events
  • Ready liquidity through an active forest market

Direct ownership of forestry assets is not regulated by the Financial Conduct Authority

For further information, please contact:

Anthony Crosbie Dawson: +44 (0)1451 843 096                       (Timber funds or direct ownership)

Graham Carter: +44(0)173 863 1949                                            (Direct ownership only)

Edward Daniels: +44(0)1451 843 094                                          (Timber funds or direct ownership)


Current direct forestry investments

Gresham House provides specialist investment advice on the acquisition of forests and renewable energy projects throughout the UK. Gresham House acts for the purchaser in identifying suitable assets, negotiating their purchase and closing the transaction, providing the investor with a detailed report and business plan and putting in place recommended management.

This service is available to investors who wish to instruct Gresham House to act on their behalf. Please telephone us on +44 (0)1451 844655 to discuss your requirements.

South West Scotland - Planting scheme

211 Hectares

£852,000 (Guide Price)

A hill farm on the edge of forestry, with the potential to convert into a compact, commercial planting scheme.


Cornwall - Commercial forest

£1,555,000 (Guide Price)

158 hectares

A mixed age commercial plantation, which will provide income from harvesting the remaining mature crops.

Central Scotland - Large scale planting scheme

2,127 hectares

A large scale planting opportunity acquired for a client.

Forestry FAQs

Why is forestry so tax efficient for UK residents?

There is no income tax when selling timber and no Capital Gains Tax (CGT) on the increase in value of timber. The increase in the value of land is subject to CGT. A commercial forest will also qualify for Business Property Relief (BPR), which provides 100% relief from inheritance tax (IHT), after two years of ownership.

When does the two year qualifying period for receiving 100% relief from IHT begin?

The two year qualifying period for BPR commences when the trade starts, i.e. from the purchase of a property or acquisition of units in a forestry fund.

What are the main markets for timber?

Forest owners benefit from diverse markets. There are seven main markets: construction, packaging, pallets, fencing, panel board, paper and biomass for energy and heat – this last market has led to new competition for the least valuable part of the tree and therefore increased the value of the whole tree to timber purchasers. The forest owner is not dependent on one market to sell timber to.

Why have returns on forestry investments been so good? (the independent IPD UK Forestry Index annualised 10 year return to December 2017 was 15.7%)

The essential ingredient is the growth rate in the volume of timber, combined with an increase in the unit value of the timber as the trees increase in size – larger trees provide less waste for sawmillers. So even at static timber prices, the value of timber should increase. Gresham House expects timber prices to be higher in the future due to substantial increases in consumption in both the developed and developing economies, in particular China and India, at a time when supplies will become increasingly constrained. A further factor in performance, as measured by the IPD UK Forestry Index, is a rise in underlying land values and the general level of plantation values, which are dictated by investor demand and the lower yield requirements of such investors. This is in turn partly driven by expectations on future timber prices. Rising timber prices should therefore enhance returns.

The Gresham House Timber Index indicates that there is a degree of volatility in timber prices. Is this an issue in considering an investment in forestry?

A benefit of forestry is that when prices drop there usually is no need to harvest. Value is stored “on the stump” and the trees continue to grow both in volume and unit timber value. There is generally a window of five to fifteen years in which a crop can be harvested, which means that the volatility in timber prices can be exploited to the landowner’s advantage.

What is the minimum investment?

Gresham House acts for private clients with an acquisition appetite for direct ownership of commercial forests, generally from £2 million upwards.

Smaller investments, typically at around £90,000, are available via other investment structures.

Is an investment liquid?

There is an active market for forest properties which sees good properties sold quickly. Forestry is the same as any other property, it is potentially illiquid as there is no perfect, established market. However, the trees continue to grow in volume, should a property remain unsold.

Who manages the forestry?

Experienced woodland managers. They provide ongoing budgets for the development of the forest, which are reviewed by Gresham House and amended as necessary in order to ensure that the investment achieves the best possible return in the long term.

How is the forestry asset valued?

By taking into account location, the age and quality of the crop and the state of the infrastructure, in particular access to the forest. Value is ascertained by market evidence of comparable recent forest sales and is also calculated on a discounted cash flow basis.

How expensive is it to restock a forest?

The gross cost is about £3,300 per hectare. There is normally a restocking grant available to aid re-establishment, which results in a net cost of approximately £3,000 per hectare.

What type of tree is best to invest in?

Sitka spruce produces the greatest volume of timber in the shortest time in the UK (it has a 35-50 year rotation) and has the greatest diversity of end uses. Once established, Sitka spruce grows at about 5% per annum on average across a rotation.

What are the main risks of an investment into forestry?

The main risks are fire and windblow. These, along with public liability, are insured against. There is currently no insurance cover for pests and disease but trees with a relatively short rotation, such as Sitka spruce, are less vulnerable to pests and disease than trees with a lifespan of more than 50 years.

What are the environmental benefits to owning forestry?

All Gresham House properties are managed in accordance with the UK Woodland Assurance Standard (UKWAS) and therefore have full Forest Stewardship Council (FSC) certification. This means that all harvested areas are replanted, ensuring that the forests are sustainable. Furthermore, the forests are managed in an environmentally friendly manner, which encourages biodiversity.

Summary of Sitka Spruce Plant Research

There is a continuing programme of research into the characteristics of Sitka spruce with the long term aim of improving the genetic quality of planting stock. Gresham House actively monitors the latest developments in crop improvements to ensure our clients forests are maximising productivity and return on investment through biological growth and crop quality.

The research is being led by the Sitka spruce Breeding Co-operative which is a collaboration between Forest Research (the research agency of the Forestry Commission) and senior members of the forestry industry. The key objectives are:

  • To improve the economic return of key coniferous species by ensuring they are well adapted;
  • To grow faster and straighter than unimproved stock;
  • To possess better internal wood qualities which are able to satisfy the construction timber market.

Target Characteristics of Sitka spruce

In analysing tree form the following characteristics are assessed, all of which are important factors to end users and thus affect commercial value. Research is actively focused on improving these specific traits of Sitka spruce:

  • Diameter increase
  • Wood density
  • Stem straightness
  • Minimal branching

Improved Sitka spruce

Superior characteristics are being demonstrated by Seed Orchard plants and MOO cuttings when compared with the original ‘unimproved’ Queen Charlotte Island (QCI) provenance trees planted in the UK during the 20th Century.

Seed Orchard Sitka

Seed Orchard Sitka spruce (also known as ‘improved’ or ‘elite’ Sitka) are selected plants grown in a seed orchard from parents specifically chosen for genetically superior characteristics. These are known as ‘half-sibling’ plants, as each seed is produced from different parents. Due to the range of parents these crops do display genetic variation however to a much lesser extent than unimproved stock. Seed Orchard seedlings are robust plants suitable for planting in a range of conditions.

VP (MOO) Sitka

Vegetatively propagated (MOO) Sitka is the most genetically advanced Sitka seedling currently available. These are full-sibling cuttings (where both parents are known) grown from tip cuttings taken from selected improved mother plants. The similarity in genetic traits is expected to increase the uniformity of the crop compared with Seed Orchard and QCI stock. These plants are estimated to show a 20% improvement in diameter increase, straightness and branching without compromising timber density. The seedlings can be more fragile during the first phase of establishment. Accordingly, Gresham House typically plant these only on the best soils at lower altitudes to minimise the increased costs which can occur from failed plants.