RICS is consulting on an update of Valuation of woodlands, originally published in 2010. The consultation runs until 15 November, and the new edition will reflect what is a fast-changing market.
With the UK government committing to spend more than £500m of the £640m Nature for Climate Fund by 2025 to achieve its target of planting 30,000ha per year by 2025, there may be more work for valuers in this area.
The updated edition will therefore be aimed at professionals valuing forests and woodlands who need to ensure they are considering a diverse range of complex, evolving issues that can affect value. These include physical aspects such as location or site characteristics, tree crop details, market factors, for example, supply and demand, and legislation and regulation.
It outlines the bases of value in the RICS Valuation – Global Standards (Red Book Global Standards), which will be driven by the purpose of the valution, and distinguishes between those and the values attributed in a natural capital approach or when calculating natural capital values.
The many different types of woodland and forest can affect the valuation approach.
There are essentially two market categories of woodland:
primarily commercial or investments
Professionals may come across many different types in terms of size, species, age, silvicultural systems, structure and condition. Furthermore, amenity woodlands and commercial woodlands have no set definition, while some have characteristics of both categories.
Woodlands are subject to a range of different legal interests as well. In particular, some are let on long leases, and many have their sporting rights reserved.
Each different type can also be valued on different bases, including market value, fair value, market rent, investment value or worth, equitable value, synergistic value and liquidation value.
Valuations are required for different purposes, but typically include those for: fund or financial accounting; sales and acquisitions; pre-purchase advice; loan security; winding-up procedures; taxation, including inheritance and capital gains taxes; divorce; business arrangements; financial reporting; dispute resolution; disposal under the Charities Act 2011; and expert witness work.
Valuers may not be silvicultural or forestry experts, but they may still have the skills to interpret appropriately sourced data required in the context of the land use and market.
RICS senior specialist, land and resources, Fiona Mannix says: 'We would like to hear from all members in this sector. We want a representative view of the market from professionals involved with valuing these assets, particularly when there is such interest in this asset class.'
Related competencies include: Forestry and woodland management, Valuation
Chris Jofeh 02 June 2023
Dr Debadayita Raha and Prof. Sian Davies-Vollum 01 June 2023
Ben Willis 26 May 2023