Many corners of the Scottish countryside have been forged from the traditional Scottish estate, centred on the “big house” with the extensive grounds and policies designed and enhanced to provide the perfect setting for the wealth of outdoor activities enjoyed and offered by so many estates. These including the traditional sports of fishing, shooting and stalking, not to mention many having strong farming and forestry interests, together with many estate houses providing homes to all that worked on the estate.
The Scottish estate has always been of great interest, predominately driven by the potential buyer’s interest in the traditional sports the estate has to offer, together with the desire to “get away from it all”. The demand, without doubt, has generally outstripped supply, with only a handful of estates ever offered for sale each year, either privately or on the open market.
However, with the accelerating and very tangible understanding of climate change, the growing desire by many to offset carbon usage and the now increased need by businesses and corporations to not only be visibly “green” but to try and meet their own net zero targets, the traditional estate, together with the hill and stock farms, are now of increased interest from this new buyer, looking to use the land for a modern purpose. Some call it rewilding or habitat creation and expansion, or more simply woodland creation. The buzz word is Natural Capital and whilst the language may be new, the reality is that this is just about managing the land to meet the demands of the market, with the market moving towards society rather than individuals. Some buyers look to plant well designed productive forests, others native woodlands or indeed a diverse mixture of both, with the newer peatland restoration also now coming into the mix. We should perhaps also be asking “what will be the next ecosystem service to be drawn upon”?
The interesting change being witnessed is there is now a range of buyers with a range of interests being sought from a Scottish estate coming forward and that no longer is it just those interested in the more traditional sports of grouse shooting, stalking, fishing and low ground shooting. Thus on purchase an estate may cease as a traditional sporting estate and be much orientated around natural capital/ re-wilding/ tourism or a mix of all. Consequently valuing and how we market estates is also now changing. As a firm, who have specialised in the sale, purchase, valuation and management of estates for many decades and we consider this changing and evolving market in the Scottish estate is at a pivotal point. For some of us this is the point where we look forward to how we will value an estate in the future and back at how we used to value them! We have embraced this change, without loss of sight on the past, we are ensuring we learn the new language and we are investing in people with the necessary skills and expertise to ensure our clients get the very best and up to date advice. We are delighted that Dr Eleanor Harris has joined us to strengthen the team as our Natural Capital and Carbon Leader. Eleanor will work across the business and provide a focus to ensure we maximise the opportunities ahead.
The rise in values of estates with potential to embrace delivery of ecosystem services has been fascinating to observe, as indeed has the changing face of the buyer. Hill ground, which until very recently, may have had a capital value of something in the region of £600 to £800 per acre, can now see prices nearly double these figures and in some cases sometimes more. In most cases a number of bidders have come forward at a closing date and this has successfully helped drive sale prices up to their maximum achievable level.
During the recent sales of Glenlochay Estate in Stirlingshire and Auchavan Estate in Angus, the changing face of the buyer started to become more apparent with a small number of Natural Capital buyers coming forward. However, the recent sale of the Kinrara Estate in Invernessshire saw much more evidence of this with an increased number of buyers looking to invest in woodland creation potential and associated Natural Capital outputs. This new modern buyer can be wide ranging from corporations, institutions, investment houses, business owners to private individuals with their own personal environmental motivations and interests.
Most recently we presented an extensive stock hill farm to the market on a strictly private basis and without exception, all the interest was in the potential to manage the Natural Capital. Private, off market sales are increasing in number, principally driven by some owners keen to retain their privacy and achievable due to a strong mailing list of active buyers. Thus it is advisable to register and share your “wish list” with us.
New owners may of course wish to continue to enjoy the traditional sports, whilst at the same time perhaps introducing some native or even productive woodlands for a future income, potentially installing a hydro scheme, turbines or maybe generating further income from holiday letting units, farming or the more bespoke ideas of a distillery or wedding venue. Thus such an acquisition can be seen as a “win/win” investment as it can allow Environmental and Social Governance (ESG) requirements to be met whilst providing a financial return from others parts of the estate.
The clear observation is that those looking to buy an estate have increased in number, they come with a much wider variety of interests than previously seen but the supply remains tight and limited. So for those considering a sale of a either a traditional estate or stock farm, now perhaps couldn’t be a better time.
For those looking to either sell or buy an estate, Galbraith are extremely well placed to assist with its network of offices throughout Scotland and the north of England and a team of professionals highly experienced, skilled and qualified to advise, not only on the sale or purchase but once secured with a range of further property services including forestry, management, renewables, building surveying and planning.