Finnish investor's arrival will drive forestry land prices to €5,500/ac
A 10pc lift in the floor price of forestry land is anticipated following the entry of the Finnish- based investment firm Dasos Capital into the Irish market.
Industry sources and estate agents maintained that Dasos's efforts to build a sizeable portfolio of Irish woodland over the next three years would drive competition for both bare land and semi-mature plantations, and prices would rise as a consequence.
Bare land for forestry generally makes between €4,000/ac and €5,000/ac, but prices are expected to jump by €500/ac to a top of €5,500/ac as the Finnish outfit compete for land.
Last week, it was announced that Dasos would head up a fund, which is backed by the European Investment Bank and the Irish Strategic Investment Fund, which aims to invest €112m in Irish forestry.
The fund intends to purchase and lease around 15,000ha of bare land and semi-mature plantations right across the country.
It has been suggested that Dasos would struggle to secure this area of ground given the existing level of competition for suitable land.
Roscommon auctioneer John Earley said he was already getting €5,000/ac for planting land but he predicted that prices would rise further if the push for forestry ground intensified.
"With €112m coming into the sector, the market can only get stronger. But it has to be the right quality of land, and the right size of property - 80ac or more," he said.