by John Bound, Partner
Having been involved in the sale of the majority of sporting estates in Scotland last year, we were really very reassured by how robust the estate market proved to be, despite the recession.
The reality last year for our firm which has been involved in the estates market for nearly 50 years was a lack of enough good estates on the market to meet the demand.
It would be absurd to suggest that the estate market was completely unaffected by the severe economic downturn. In general, there were fewer buyers but still a sufficient number resulting in competition to buy the few estates that were for sale.
I was therefore somewhat baffled to read recent press reports from another agent claiming Scotland's sporting estates halved in value last year, as this was certainly not our experience. Indeed, we sold, or have under offer, all the sporting estates on our portfolio at or around the guide price.
I can only surmise that the sale of large rural houses with grounds has been confused with the sale of traditional sporting estates.
Like all residential property, the value of large houses was indeed affected by the recession, although falls in value in this sector have certainly not even been as high as 50%, whilst the Scottish estates market held up well throughout 2009.
As a firm, we predict a positive year ahead for the sale of good, traditional Scottish sporting estates. There is no doubt in my mind that serious prospective buyers have been sitting out the downturn but at no stage has their interests in estates waned. We also believe it is the quality of the sport that underpins the interest as well as the long-term investment potential.
Many highland sporting estates enjoyed their best grouse shooting for very many years last season and you only have to look at the publicity the start of the salmon fishing season generated to recognise the level of interest that exists in country sports.
Our sporting lets partner Robert Rattray and his team dealt with intense demand for sporting lets last year and the indications are that 2010 will be a another year to look forward to.
Of the estates we marketed last year, notable examples include:
- Langwell Estate, Wester Ross, a first class west coast deer forest and sporting estate, totalling some 17,000 acres, with a lodge and four cottages, an average cull of 23 stags and 35 hinds, salmon fishing on the river Canaird and the Rappach water, trout fishing in some 40 hill lochs and a few grouse.
- Corrybrough Estate, Tomatin, a renowned Highland grouse moor, extending to some 3800 acres, with a lovely 10 bedroom lodge three cottages, salmon fishing on the river Findhorn and a five year average of some 193 brace of grouse, together with a challenging lowground shoot.
The recent sale of Camusrory on the Knoydart Peninsula proved an interesting landmark transaction in the Scottish rural property market. Camusrory is a traditional stalking property of some 8,000 acres with a modern traditionally styled lodge, three further residences and useful outbuildings. The sport includes stalking, fishing and ownership of the entire River Carnach system and occasional woodcock. The vendors wished to retain a 50% interest in the property and after considerable exposure a like minded purchaser was identified.
- Lochindorb Estate - a fantastic and very productive grouse moor, near Grantown- on- Spey. Extending to just over 9,000 acres, Lochindorb has produced consistently good bags, with a five year average of 916 brace, and around 1200 brace shot this season, with 165 brace on the best day. The estate includes a traditional nine bedroom lodge in a magical, lochside setting, three cottages, a number of trout lochs, together with some enjoyable rough shooting.
Scottish Estates have been less vulnerable to decreases in value because in most cases they are made up of a diverse range of property types and represent a balanced portfolio. The residential element of an estate usually comprises houses and cottages which are in scenic and unspoilt areas. Such properties will sell in any market due to their scarcity.
In addition, many estates have potential for renewable energy projects such as wind farms and hydro power schemes which can also add significant value if consented.
Farms and forestry are two asset classes which have not suffered falls in values during this recession. Farm land values have remained stable due to scarcity, buoyant livestock prices, the exchange rate and Inheritance Tax reliefs.
Forestry has actually increased in value in 2009 due to strong demand from investors and processors. Forestry funds and private individuals see timber as a commodity with a bright future which will be competed for by the energy, construction and paper industries. The tax reliefs and the fact that forestry qualifies for private pension schemes add to the attraction as well as processors looking to secure long term supplies.
Whilst the recession has taken some purchasers out of the market and the very high premiums paid over valuation up until late 2007 are at present perhaps a thing of the past, the values of the component parts of estates remain robust.
If you would like to talk to any of our estate advisers then please do not hesitate to get in touch with our teams located throughout the whole of Scotland.