Romania, Hungary, Poland, Zambia, Mozambique and Brazil posted the highest growth rates in average farmland values between 2002 and 2012, according to data released by Savills Research, the UK property company, last week.
Romanian farmland was the biggest achiever where farmland values grew on average 40 percent each year. Hungary and Brazil recorded growth of 25 percent each year and Polish values were up 10 percent on average each year over the 10-year period. On a global basis, farmland values have achieved 20 percent annualised growth since 2002.
More mature markets still reflected healthy growth of between seven percent to 20 percent, according to the Savills report – International Farmland Focus 2014 – and Ireland was the big winner between 2011 and 2012.
Farmland assets also exceed the performance of other alternative assets including commercial and residential real estate in mature counties such as the UK. Between 2002 and 2012, farmland capital growth reached over 12 percent in the UK compared with six percent residential real estate annualised growth and one percent in commercial property during the same period.
Savills Global Farmland Index was launched in 2012 and is based on 15 key farmland markets and aims to provide farmland value trends globally. It is derived from the value of cropping and arable land in the domestic currency then converted into US dollars.
“Although converting to US$ per hectare can have an effect on annual growth rates in terms of domestic currency, it gives potential investors a good starting point for comparable analysis,” said Ian Bailey, head of Rural Research at Savills in the report.
In addition to that index, the firm also now tracks the performance of new emerging markets including Ghana, Indonesia, Malaysia, Mozambique, Tanzania, Uruguay and Zambia.