Saturday 1 October 2016

Rich pickings - large forestry portfolio in Kerry

A massive forestry portfolio is on the market in Kerry with a price tag of close to €1.4m

Jim O'Brien

Published 17/02/2016 | 02:30

The property extends to 937ac in four locations in Kerry.
The property extends to 937ac in four locations in Kerry.

One of the most extensive forestry port-folios in the country is on the point of being sold by private treaty. In four different locations in Kerry the property extends to 937ac and was on the market with an overall guide of €1.375m. One of the lots is under offer while three of the lots have attracted wide interest and negotiations with a single buyer for the three are at an advanced stage.

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The sale is jointly handled by Ganly Walters and Scottish agents, John Clegg & Co, Edinburgh, Scotland.

The forestry in the portfolio has run its course in terms of premium payments and the sale is based on the value of the timber and the land. According to Patrick Porteous of John Clegg and Company much of the timber market in Ireland is now entering a mature phase, a phase beyond premiums.

He says that farmers and investors need to look beyond what planted land and timber will return in terms of annual payments and realise that it is a marketable commodity at many stages in its existence. "Forestry is seen as a sound and safe investment compared with equities, which are so volatile."

Mr Porteous points out that from the time it is designated as planting land, forestry can realise a return at many stages of its existence and it isn't the lifelong inaccessible investment that many have come to regard it as.

"When the premium expires in forestry landowners and farmers often ask, 'What will I do with it now?' I am saying that forestry is marketable at any stage, it is regarded as a safe haven for money and it is very tax efficient."

In this regard the sale of the land in Kerry marks a new stage of maturity in the forestry market in Ireland.

The largest portion of the Kerry portfolio is located at Curraghmore West - off the N70 and 8km from Tralee on the road to Castlemaine. This portion, Lot 1, extends to 318.26ac and comes with a guide price of more than €275,000 or €864/ac.

Access points

Planted in 1987 with Sitka Spruce interspersed with Lodgepole pine, the section is accessed off the N70 by a country road that runs down to the west of the property, there are two primary access points to the forestry and potential for a third if needed. Mr Porteous says this section is currently under offer.

The next parcel known as Lot 2 is located on the Iveragh Peninsula 12 km southwest of Killorglin at a place called Goulnacappy. Extending to 279.22ac this is for sale with a guide of more than €250,000 or €895/ac. It was planted in 1990 and is mainly in Sitka Spruce with some Larch, Lodgepole Pine and mixed broadleaf trees.

About 45ac were burned in a hill fire in 2010 but this was replanted and is growing well. Access is only possible by four-wheel-drive at present but grant-aid may be available for improving access. A neighbouring farmer has permission from the current owner to cut turf on part of the property on an annual basis only.

The next piece, Lot 3, is located 8km east of Kenmare and north of the R569 at Gortnacurra and Cooragweenish. Extending to 217ac it is on the market for offers in excess of €525,000 or €2,420/ac. The property is accessed by 1,500m of roadway thanks to a grant-aided development in 2010.

About 156ac were planted in 1992 with the remainder planted in 1996, while about 22ac remains unplanted. The trees are primarily Sitka Spruce with some Lodgepole pine.

The last piece, Lot 4, is located nearby at Derrylahan is also 8km east of Kenmare but south of the R569.

The vendors are looking for offers in excess of €325,000 or €2,649/ac for the 122.7ac making up this part of the property. It was planted in 1997 and is made up primarily of Sitka Spruce, Japanese Larch and Lodgepole pine. Access is from a minor road on to an internal forest track currently used by Coillte for haulage.

According to Mr Porteous, serious negotiations for lots 2, 3 and 4 are under way with a number of bidders but one bidder is making substantial headway.

Interest came from Ireland, the UK and the EU but it appears the ultimate purchaser will be Irish.

According to Robert Ganly of Ganly Walters, the properties are well served by the public road system and there is a ready market for the product with a variety of sawmills, timber contractors and timber processors in the catchment area of the plantations.

Interested parties are asked to email or write to the joint agents. The portfolio is currently managed by Cork based Lissarda Forest Ltd and further information is available from their offices.

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