Investment funds worldwide after large farms in response to roaring investors´ demand to buy farmland assets
Up for the seventh month in a row, the closely watched FAO Food Price Index touched its highest since records began in 1990, in nominal terms, and topped the high of 224.1 in June 2008, during the food crisis of 2007/08.
With agricultural commodity prices at multi-year highs, buying farmland is seen as a more direct way to cash in on valuable crops and to take advantage of long-term appreciation of farm property.
As a result, investment funds worldwide have put an estimated $15 billion to $20 billion in agriculture globally, and interest is also growing from ultra-rich investors and pension funds, which see farmland as tangible, strategic assets.
Private funds are not the only ones planning farm operations. As an example, with the purpose of ensuring food security, the state-owned Libyan Foreign Investment Company (Lafico) has set up a company dedicated to investment in agricultural projects abroad, with ongoing attempts to plant wheat in Argentina and Brazil.
Potentially higher returns are possible in emerging markets, where entry values are low or agricultural production is currently underperforming. Thus, farm areas in Eastern Europe, Africa and specially South America have become hotspots for farmland investing. These countries stand out as having the best potential for direct investment for those with a three year investment horizon.
South America is today worldwide considered a top place to buy, lease and manage agricultural lands for profit. Argentina stands out among the other countries for its blessed soil and weather conditions, abundance of natural resources, great infrastructure and the unique possibility of acquiring large extension of productive farmland.
As the land available for agricultural production around the world becomes increasingly scarce, yield will be key to maintaining food supplies in the future. And few agricultural economies can compete with the yields obtained by the Argentine farmers, showing a very high return on investment compared with other major food export producing countries in the world; in most cases, above 6% yield.
Gateway to South America, an independent facilitating and advisory company committed to helping investors from around the world, has excellent investing opportunities, including: 82.000 hectares farm with good access, close to airports, hydrological studies available, excellent for extensive cattle farming and fine agriculture; 43.000 hectares for olive, wine, fruits and bio-fuels with abundant water reserves, access to railway, airport and electricity; an approximately 18.000 hectares farm with 16.000 hectares in full cropping production of soy, corn, and wheat, located between 3 rivers and excellent internal infrastructure; over 400.000 hectares of non-productive farm with proven potentialities and feasibilities studies for agriculture, cattle ranching, bio fuels, renewable energies, mining and tourism; among others options.
However, farmland investments can be tricky and investment funds are scrambling to build up rural expertise. Several investment managers struggle to bridge the gap between Wall Street and the farm track, with a search for farm managers who can deal well with investors and bankers who understand the basics of agricultural operations and farmland issues, including jobs and security of food supplies.
Buying agricultural lands requires dealing with not only a global supply chain and lots of regulation, risks and factors that the traditional finance professionals do not know about, but also local links. Many investors also want international holdings, requiring their advisers to navigate different tax and regulatory systems, as well as rules on foreign land ownership. That makes it hard to get access but it also presents huge opportunities. The question is, how do you get into it, how do you access the market
Gateway to South America is an experienced company specialized in advice for foreign investors who wish to invest or sell attractive properties in Argentina, Brazil, Uruguay and Chile. GTSA provides Investment Farm Tours for Individuals or Small Groups that don’t want to wait for a formal tour but wish to go now. Everything is arranged for investors from accommodation, private plane, private car, inspections, and where necessary, arrange meetings with appropriate specialists.
The window is fast closing on investment opportunities of a life time. For the simple reason that for the first time in recent history, Argentinean, Brazilian, Chilean and Uruguayan assets in US, UK Pounds and Euro terms offer incredible value. Why else would you see one of the world’s most savvy investors, George Soros amongst others investing so heavily in these countries agricultural sectors.
The Gateway Team – When You are Serious About Property
About Gateway to South America
Gateway to South America was established in 2006 as a single office in Buenos Aires. The company has since expanded into a vibrant regional network, servicing the Southern Cone communities of Argentina, Brazil, Chile, Paraguay, Peru and Uruguay with professional real estate services. Founded by Geoffrey McRae a New Zealander who maintains an active role in the business it has developed into an International team that has a well-deserved reputation for strong local knowledge, experience and professionalism. I hope you enjoy reading our news site. Please share it on your social media below.