| Investing in farmland has long been used as an | | | | farmland investment packages aimed at retail |
| effective tool to build diversity into institutional | | | | investors with capital of between £25,000 |
| investment portfolios, historical performance of | | | | and £5 million. |
| farmland as an asset is impressive; Market | | | | "For the first time our clients can invest in |
| research conducted by Knight Frank Agricultural in | | | | farmland without having to commit millions of |
| October 2009 offers a forecast indicating UK | | | | pounds of capital, and they can enjoy net income |
| farmland values will double by 2016. | | | | yields of 6% through leasing the land back to the |
| It is sound fundamentals that drive this growth, | | | | selling farmer, who works the land and sells the |
| as less farmland comes available for cultivation, | | | | crops" Commented David Garner - Managing |
| and more food crops are diverted to produce | | | | Partner at boutique alternative investment |
| biofuels. At the same time, the global population is | | | | advisory DGC Investment Consultants. |
| expanding, which is widening the gap in supply and | | | | According to figures from the Royal Institute of |
| demand substantially; demand for wheat has | | | | Chartered Surveyors (RICS), actual real growth |
| outweighed supply for seven of the last eight | | | | rates for UK farmland have been 9.8% as an |
| years. As any asset is short supply and high | | | | annual average over the last ten years, 13.5% |
| demand, farmland provides the ideal environment | | | | over the last half-decade, and over the last three |
| for a stable and sustainable growth investment, | | | | years UK farmland has increased in value at a |
| whilst at the same time enjoying an exceptional | | | | rate of 18.1% per year. UK farmland has more |
| income yield. | | | | than doubled in value over the last seven years |
| The problem with farmland investment for smaller | | | | and most industry experts are projecting a similar |
| investors has always been centered around | | | | performance over the next seven. |
| accessibility, as the majority of major players in | | | | So the answer to the question is yes, farmland |
| the farmland investment business require a | | | | investment can be exceptionally profitable for |
| minimum of $50 million dollars, and concentrate | | | | smaller investors, provided the right structure is |
| only on sourcing large deals for investment funds. | | | | wrapped around the investment to mitigate risk, |
| So the smaller investor has always been naturally | | | | and you partner with the right people, as with any |
| prohibited form investing in farmland. | | | | investment. |
| Now however we are starting to see innovative | | | | |