Two bids are on the table for one of the biggest sales of private UK farmland after Strutt & Parker (Farms), real estate insiders told Agri Investor in an exclusive interview.
The family owned company, which is one of the largest agricultural businesses in the UK, operating more than 30,000 acres of farmland, announced the sale of 13,000 acres of freehold farmland last September. Located across the counties of Suffolk, Essex and Cambridgeshire, the majority of farmland of Strutt & Parker (Farms), is classified as grade 2 and 3 capable of growing a wide range of crops including cereals, other combinable crops and root crops. Such a sale is relatively rare as land in the UK is often separated into small farms, insiders said. It is the first time in its 100-year history the multi-asset rural property company has been bought to the open market.
It has a varied mixed-property portfolio comprising rural, residential and commercial property including the Whitbreads Business Centres brand. It farms more than 30,000 acres in total, with around 13,000 acres of freehold farmland and a further 20,000 acres of farmland subject to third-party agreements of varying lengths. The mixed residential portfolio includes 121 freehold properties of various styles and types including houses, cottages, flats. Significant investment has also been made in several renewable energy projects.
The portfolio is estimated to have generated revenue of around £21 million ($26.9 million, 23.6 million) for the 2018 financial year. The stakeholders plan to sell Strutt & Parker (Farms) as a single-share transaction. The business will be sold as a going concern including all its employees and their existing arrangements.
Savills and Deloitte LLP have been appointed as advisers for the transaction by more than 80 shareholders of the land which is estimated to raise more than £200 million. People close to the sale said two bids are currently being considered and the deal is close to being sealed. It is a large portfolio with a potential to sell-off assets, they indicated.
The reason behind the move is because the shareholders believe the time is right for the land to go to a larger corporate player, David Jones, corporate finance partner at Deloitte told Agri Investor.