Alternative Outlook

A piece of land in the country is a fine aspiration for any City gentleman, but it could also prove a shrewd investment move. With the markets far from certain and inflation a concern, farmland is looking more and more appealing.

Land has a lot going for it. There is nothing more tangible than a piece of earth to call your own and unlike similar investments, such as gold, land will provide an income. While it is possible to bring more land into production, it is clear that demand is going to continue to outstrip supply for the foreseeab…

Brooks Macdonald Funds announced that its Channel Islands-listed UK Agricultural Land Fund has purchased its fourth farm for just over £2m, a discount of 7% to the market value.

The farm, which is located in Lincolnshire, is close to one of the Fund’s existing holdings and offers approximately 300 acres of highly productive grade 2 and grade 3 arable land.

The Fund has seen increased interest from investors looking to invest in assets which offer long-term security. The performance of land has been less volatile than other investments,…

While the stock market bounces around wildly, one alternative investment that sits a safe distance away the world’s financial woes has been doing just fine – a new report shows forest values up 34 per cent over the past year.

Green, sustainable and considered low risk over the medium to long-term, timber sounds like an investors dream, especially when its inheritance tax and capital gains tax free potential is brought into play.

The catch is that most timber investments require a large amount of capital, run for a lengthy period and …

Forestry, which is often seen as a safe investment in uncertain times, is proving an excellent option during the on going financial crisis, according to a report by property consultants Savills and UPM Tilhill.

The Forest Market Report 2011, published yesterday (Tuesday 29 November) in London, says the strength of the forest market over the past 12 months will be no surprise to those in the industry who have long believed in the potential of the underlying investment returns.

It claims that as a medium to long term investment, forest pric…

If you can’t buy gold to protect your wealth in the face of global economic uncertainty, is farmland the next best thing?

London and country agents Savills says the value of grade three arable land rose 3.3 per cent during the second quarter, following a 2.7 per cent rise in the first three months of this year.

The average value is now £5,900 an acre, up by almost 200 per cent on a decade ago.

Ian Bailey, head of Savills rural research, says: “This average half year growth of six per cent accounts for nearly two-thirds of the grow…

Farmland prices in the UK increased 13% in 2010 alone, according to the Knight Frank Farmland Index. High quality land is available at a fraction of the price in places like Argentina where farmland value went up 10% last year.

Prices have been driven by a rising demand for land with sovereigns looking to secure their food supply and investors looking to diversify their portfolios.

Developing nations often perceive this sort of investing to be land grabbing and countries like Brazil have moved to restrict ownership.

Economists like Rob…

Rising food prices have pushed up the price of arable land in parts of the UK, but life is tougher for livestock farmers.

Agricultural land prices in Britain have hit record levels following the surge in global food prices, according to figures from Savills.

An acre of prime arable land in East Anglia is fetching up to £8,500 compared with around £3,000 in 2005, with demand driven by the dramatic increase in wheat prices over the past year. Last week, feed wheat was selling for nearly £200 a tonne, a 115% gain on the £93 a t…

Investors have “woken up to the benefits” of holding farmland during inflationary times, Savills said, noting an 11% rise in average UK prices last year, and lifting its forecast for growth in 2011.

The number of new prospective farmland buyers registering with the property consultancy surged by 45% last year, after being relatively stable since 2006.

In actual deals, the proportion of UK farm purchases sealed by buyers citing investment as their primary motive doubled to 31%.

Institutional buyers accounted for 10% of purchases, …