Farmland Partners is the latest farmland real estate investment trust (REIT) to raise fresh capital for investments.
Expected to close 21 July, the NYSE-listed REIT is selling 3 million shares of its common stock at $11 per share, giving underwriters Baird, Stifel, Nomura and Wunderlich a 30-day option to purchase up to 450,000 additional shares of common stock, according to a statement. Net proceeds are expected to be just over $31 million.
The proceeds will be contributed to its operating partnership for future farmland acquisitions, according to the statement. Proceeds will also be spent on “general corporate purposes” like partial repayment of outstanding mortgages with First Midwest Bank.
Farmland Partners, known for specialising in buy-and-lease commodity crop farmland, inked its very first permanent crop deal earlier this month. It purchased a 125-acre blueberry farm in Michigan for $1.2 million in cash.
Other US-listed REITs that have been raising cash for farmland investment include the Nasdaq-listed Gladstone Land and American Farmland Company, which filed with the Securities and Exchange Commission in June to raise up to $100 million in an initial public offering.
The trend is expected to be global.
First Agriculture Fund Holdings, launched by John Baker, former Asia head of food and agribusiness research and advisory at Rabobank, also has plans to list a $500 million REIT on the Singapore stock exchange in the next few years.
“When I talk to sophisticated investors about investing in things like agri land, one of the major investor issues is liquidity,” Baker previously told Agri Investor. “If you don’t have that, it changes the whole risk prism through which sophisticated investors view the investment.”