Investment in Farmland: African Farmland is the Next Frontier

A very interesting piece here from the Wall Street Journal on the rapid rise of private capital in African farmland investments.The article has some very interesting statistics:

"To meet growing global food demand the United Nation's Food and Agriculture Organization estimates an extra six million hectares need to be brought under cultivation every year for the next 30 years. With sub-Saharan Africa estimated to hold up to 60% of the world's remaining uncultivated land."

The article also references a private equity fund called Emergent Asset Management here in London that is purely dedicated to investing in African farmland.  It sounds quite intriguing - until one sees the price tag which calls for a minimum investment of US$500,000 for individuals!

However, if you are intrigued by this type of investment in farmland, we are pleased to say that our unique farmland investment in Africa starts at only £5,850 (which is approximately 6,400 Euros and US$9,500).  The investment recently paid a 16.2 pc dividend yield, and was awarded the "Alternative Investment of the Year" award from a prestigious UK property association.  The key is that the price of farmland in Africa starts at such a low base that both high yield and tremendous upside in land values are possible.  The target return is yearly dividend of 15 pc dividend yield, with a 7 pc yearly upside in capital value of the land (although in practice its been way more than just 7 pc so far).  Like all farmland investments, this one is meant to be held for the medium to long term, although it can be sold at any time.  The initial phase of the project is selling out quickly, but additional acres are being purchased by the project developers due to the high demand from retail investors whom are keen to add some diversification to their portfolios in these unsteady times.  And, all of our projects, including this one, are SIPP eligible investments for UK citizens.

Update on GreenWorld's African Farmland Investment

While we focused in our previous post on GreenWorld's farmland investment in Australia, there is also wonderful news in regards to our farmland investment in Africa. This investment in rice farmland in Sierra Leone recently paid a 16.2pc dividend, prooving that its target for dividends of 15.2pc per annum was spot-on. Farmland prices in Africa start from a very low base, and there have been quite a few lare institutional investors such as pension funds and University endowments investing in farmland in Africa.

Please contact us at info@greenworldbvi.com for further information!

Australian Farmland: Follow China into one of the Best Investing Deals on the Planet

AN AMAZING FARMLAND INVESTMENT IN AUSTRALIA FOR RETAIL INVESTORS:

Average Price of Farmland in England: Over £6,000/Approximately US$9,300

Average Price of Farmland in America: Approximately US$10,000

Farmland Investment's Australian Project: Approximately US$600

This Australian farmland project yields less due to the dryer climate in Australia, but nowhere close to 15 times less which is what it is priced at! There are undervalued opportunities left in the world -  and farmland in Australia is one of them.  One big advantage:  China is buying heavily into Australian farmland due to China's concerns with food security.  Here is another piece detailing China's foray into Australian agriculture.

To cap it off, Jim Rogers has been making substantial investments in Australian farmland, which is a great endorsement of the value in this project.

High yield, excellent capital value upside and a great inflation hedge.  And fits with SIPP rules, and due diligence on the project has also been done by an independent FSA-regulated consultancy.

Contact us at info@greenworldbvi.com for further information

Play the Rise in Food Prices with Farmland Investments

Yes another reason to seriously consider farmland investments. The premier American newspaper New York Times is out with a long and comprehensive article on the increasing stress on global food supply. They note that the rapid growth in farm output at the end of the 20th century has slowed down dramatically and that food supply is increasingly not keeping up with population growth and the rising wealth of emerging markets countries. The article foresees a need to double the food supply in the coming year to be able to feed the planet. While there reasons for optimism in certain areas, the overall tone of the article was somewhat alarming, and one can only hope that at least it serves to concentrate the minds of any policy maker who reads it. It once again confirms the wisdom of farmland as an investment - its only common sense after all that anything there is a shortage of will rise in price.

Farmland investments for retail investors are available in Australia, Europe and Africa. Purely passive investments with low minimums Contact us at info@greenworldbvi.com to learn more!

Farmland Investment Returns

While doing some research into into the performance of farmland in regards to our farmland investments in Eastern Europe, Australia and Africa, we came across an amazing table on the performance of farmland investments in the United States. In 20 years, farmland investments have never lost money. Think about that - through 20 years and two major bear markets - farmland has been a safe and profitable investment. And this is only US farmland, where prices are already quite high and returns will be more modest going forward. We believe our farmland investment opportunities will pay both high income as well as capital gains. Please feel free to look at each of our investments in farmland:

Farmland Investment in Africa
Farmland Investment in Europe
Farmland Investment in Australia

These all have low enough minimums that they are acsessible by retail investors, and for those in the UK they are all approved Sipp investments.

Introduction to Farmland Investment

Whilst farmland investment may seem like an exotic asset class to some, there are ample reasons for investors to consider adding it to their portfolios. We are not talking about agricultural funds here, but rather about direct ownership of farmland. This blog is meant to introduce individual investors to the benefits of investing in farmland, as well as to over some options for doing so. To start with, we will list some reasons below:

1) Food prices are at record high, and farmland investing is a wonderful way to leverage this trend.

2) As a hard asset, farmland is also an excellent inflation hedge. With western central banks having already engaged in extensive Quantatative Easing (QE), and likely to engage in further QE as well, investors would be well-advised to consider adding inflation hedges to their portfolios.

3) Farmland generally pays high current income. With interest rates in the West near zero and likely to stay that way for the foreseeable future, prudent savers are being punished and are forced to look elsewhere for current income. Farmland is an excellent option.

4) Farmland is also an extremely stable asset, and adds diversification to a portfolio as it does not respond to the same factors as those which influence financial assets such as stocks and bonds. After all, land and crops do not care what the DOW or FTSE or DAX do on a daily basis!

This is just a brief overview, but we hope it serves as a basic introduction to the advantages of farmland investment. In future posts, we will go into more detail on all of these points, as well as consider whether it is possible for individual investors to invest directly into farmland.

Our firm, GreenWorld BVI, are a boutique alternative investment firm and farmland investments are by far our most popular. For UK individuals, all of these qualify as approved SIPP investments as well.

We are on the web at http://www.greenworldbvi.com and can be reached at info@greenworldbvi.com. Feel free to contact us with any questions!