Savills |

aspects of land

| spring / summer 2017

INVESTMENT

UNITED STATES

CALIFORNIA

Permanent cropland includes

nuts, fruits and other highly

mechanised crops that are

water intensive and is largely

based in California.

Demand for such farms has

increased in recent years due

to increased water scarcity,

leading to 8-9 per cent capital

growth over the past 12

months. “Land with secure

water rights is becoming

harder to find,” says Matthew.

BRAZIL

Investments in Brazil and

other countries in South

America come with higher

risk, including government

instabilities and volatile

currencies. “All the key

factors that drive farmland

value growth are in place,

but there is a lack of buyers,”

says Matthew.

Argentina

$11,000

Brazil

$6,700

Uruguay

$7,500

Hungary

$3,400

United

Kingdom

$27,718

Ireland

$30,382

UNITED STATES

CORN BELT

In the US, there are two key

land markets for investors –

permanent cropland, mainly

in California, and arable land

located in the corn belt.

The corn belt, most notably

Illinois, Indiana, Ohio and

Idaho, has seen markets

fall back over the past six

months, mostly due to falling

rental values amid lower

commodity prices. “Despite

this, the medium to long

term outlook is good,” says

Matthew Sheldon. “The

fundamental demand, feeding

the world, is good and one

shock to commodity supplies

could give a large increase to

farm gate prices.”

UNITED KINGDOM

British farmland prices lost

ground in 2016, but that came

after a 10-year period of

growth. However, the market

looks set to regain some of

those losses over the next

five years and the long-term

outlook is good (see page 22).

ARGENTINA

“The areas surrounding

Buenos Aires are open to

foreign investment, but this

comprises hunting estates

and gated communities,”

explains Matthew. “Argentina

has a prohibitive government

policy, so arable land and

cattle land are off-limits. The

assumption is that Argentina

will open up its foreign

investment policy, but this is

not entirely clear yet.”

USA

California

$31,640

USA

Corn belt

$25,268

France

$6,874

SHUTTERSTOCK