South American Real Estate News

A new Global Agricultural Index shows Argentina in a good light

Precios de la tierra agrícola actualizados 2016

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Duxton Global Agricultural Property Index

Analysis of historical and forecast returns generated by investment in agricultural property has been undertaken.

Total returns from agricultural property investment have been generated. Total returns consist of capital returns from investment in land and improvements; and income returns from activities conducted on agricultural land. The Duxton Global Agricultural Property Index has been constructed with the total, capital and income returns.

Returns provide a broad measure of performance of the sector on a global basis. The returns can be used in portfolio construction analysis. Historical and forecast returns have been generated.

Assessment of the income, capital and total return performance of global agricultural property investment over 25 years to 31 December 2015 has been undertaken.

Analysis has been conducted with information from 10 countries for which data has been obtained. They represent 30% of global agricultural production. Many of the major producers have imposed restrictions on foreign ownership. These include many countries for which data has not been available. The countries included are:

  • USA
  • Canada
  • Australia
  • Germany
  • France
  • Spain
  • Italy
  • United Kingdom
  • Japan
  • Argentina

Table 1 shows that the Duxton Global Agricultural Property Index generated an aggregate total return of 11.0% p.a. and volatility of return of 2.2% p.a. over 25 years to December 2015. The Duxton Global Agricultural Property Index income return was 6.3% p.a. which exceeded the average 10-year government bond rates of 4.3% p.a. The Duxton Global Agricultural Property Index capital return of 4.7% p.a. is above average inflation of 2.7% p.a.

Source: Duxton Asset Management

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