Forest land is now selling to data centre developers for far more than the trees on it are worth, with Google paying more than €27 million for 1,400 hectares of Finnish state forest for its next two sites. That is according to Devin Stockfish, president and chief executive of Weyerhaeuser, the largest private timberland owner in the United States, who told analysts in July that developers pay “an extraordinary margin above timber values” for the sites it has put on the market.
Weyerhaeuser already has a handful of those sites on the market, Stockfish said, with speed rather than cost or carbon the objection developers raise when the company asks them to build in wood as well. Microsoft has opened the world’s first cross-laminated timber data centres in Northern Virginia, and big tech now buys up to 10 per cent of all mass timber sold in the United States.
It comes as data centres were the fastest-growing segment of American commercial construction last year, Skanska found, at 5.4 per cent of private non-residential building spending, up from 1.7 per cent in 2019. The contractor expects annual spending on them to exceed US$100 billion by 2030, more than twice today’s level, whilst steel lead times of 40 to 50 weeks are prompting its data centre clients to ask whether timber can fill the gap.
“The land sale for Google’s potential data center investment is an excellent example of how state-owned areas can be used as engines for green growth,” Juha Niemelä, director general of Metsähallitus, the Finnish state forest enterprise, said when the Government approved the Google sale nearly two years ago. The land had mostly been in commercial forestry and went to Google as raw land, with the company’s Finland country director, Antti Järvinen, calling it “the first step in a long process” before any investment decision.
That first step is now under inquiry, with Finland’s Licensing and Supervisory Authority asking Google’s project company to explain how more than 300 hectares came down at Muhos before the site’s environmental assessment was finished. Meta’s subsidiary, Valoa Networks, is running the same assessment for a 475-hectare site at Ii, north of Oulu, where five data centres are planned on mostly forestry land.
Google announced three weeks ago a 13 billion euro data centre investment in Finland over the next two years, which it calls its largest single investment in Europe, with a further site planned at Vaala beside the two now under inquiry. Meta’s assessment at Ii remains open, and Weyerhaeuser has raised its full-year outlook for the land business to $450 million as more of its forest is converted to solar farms and data centre sites.
