Beleni, Covasna, Romania Photo: Janos Csongor Kerekes
Romania is leading farmland price growth around the world. The country has seen its agricultural land prices soar 40 per cent in the 10 years to 2012, according to Savills.
Farmland has been an increasingly popular asset among investors, as limited volumes and a growing worldwide population have driven up prices in variety of countries.
Indeed, the land has long been considered a safe haven asset, like gold, resilient during times of economic uncertainty.
Global values have risen 20 per cent between 2002 and 2012, says Savill.
“Some western agricultural markets have been saturated with lifestyle investors and this has pushed pure agriculturalists to search for real income returns, underpinned by crop yield. We expect this search for global agricultural returns to continue.”
While America and the UK are established markets, though, the international advisers’ Global Farmland Index reveals that emerging markets are home to the strongest performing farmland markets.
The highest growth was recorded in the emerging markets of Romania, Hungary, Poland, Zambia, Brazil and Mozambique. As a result, investors are now broadening their horizons to new markets with an eye on greater income returns.
Asian diets have become more westernised and this is also underpinning the demand for farmland globally. Values are highest where there is access to ports, highways and railroads, aiding distribution and maximising farm profits.
Access to a natural water supply and irrigation systems is also a key factor as is the regulatory environment which varies significantly by country.