In an analysis of the forestry sector conducted this year, real estate leader Latio has concluded that Latvia is one of the best countries for investment in this field within the Baltic Sea region. Although the price of forest land in Latvia has doubled since 2005, forest property prices here remain among the lowest among the Baltic countries. Latio experts point out that, in the long term, Latvian forests are a productive asset rather than a source of quick profit.

Sandijs Lūkins, Head of the Forest Sales Department at Latio, explains: “In cooperation with industry specialists, we analysed the values and dynamics of both agricultural and forest properties in Europe this spring. Historically, Scandinavia has been the leader in the forestry sector in the Baltic Sea region. By studying recent transactions, we concluded that the highest prices per hectare of forest property are currently in Sweden. When comparing countries, our market price per hectare of forest property was one of the lowest in the Baltic Sea region. The real market situation shows that in the Baltics, prices for similar forest properties are higher in Estonia.”

The main factor influencing the value of forest intended for timber harvesting is the expected future income. This depends on the age of the forest stand, tree species and volume, quality, the existence of economic restrictions, the distance to the loading site and the point of consumption, road quality, and other factors. The legislation, which differs in every country and dictates when and to what extent a forest owner may carry out economic activities, is also of great importance. When determining the price of forest properties, the value of the forest stand is calculated, and in certain cases, the value of the forest land is also added to this price.