Farmland values shoot up across the globe

The value of farmland is growing around the world, according to Savills.

The firm's latest Global Farmland Index shows that between 2002 and 2010, values in emerging markets, such as Brazil, Argentina, Poland, Romania and Hungary, shot up. In Romania, values increased by 1817 per cent (US$ per hectare) over the eight years, while Central European countries benefited by entry into the EU, which reduced restrictions on farm payments and capital improvement grants.

Overall growth has been more muted in mature markets, such as Germany, US, France, Denmark, Ireland and Canada, adds Savills. The UK, on the other hand, bucked the trend and saw values grow by 17 per cent between 2007 and 2010; an eight-year growth of over 200 per cent.

Australia and New Zealand topped the UK's performance, with growth of 300 and 262 per cent respectively, but location remains critical due to regional variations in climate.

Ken Jones Director of International Farmland Markets said: "Capital growth is rarely the only determining factor for farmland investment and while significant growth rates have been recorded in many of the emerging markets these need to be set in the context of the opportunities to maximise income return. In more developed economic areas yields range annually between 1.5 to 4% but in emerging investment areas 5 to 8% is more typical."

Source: Property Talk Live