Savills expands global agri team – exclusive

Savills International Farmland, the agricultural land advisor and surveyor, is expanding. It is currently recruiting for two new starters to join its London-based team and is also working on establishing partnerships with investment consultancy firms in Australia, South Africa and the US.

The international farmland arm of the UK-based real estate firm has been developing its farmland valuation expertise since the 1980s. But it has now moved on from a research-led business and has been advising clients worldwide on agricultural transactions.

This has included working on the sale of agri investment opportunities in Africa and Eastern Europe and the firm is increasingly working with agri investment funds to identify good land acquisitions.

“We were very early movers in researching the global farmland market 20 years ago and are now in a position to really pool our resources and knowledge to service clients worldwide,” Hugh Coghill, director, International Land Markets, told Agri Investor.

Coghill officially established the International Land Markets division in 2010 and hired James Cairns as associate director last year to lead the firm’s effort in Africa; Cairns has worked on various agricultural land acquisitions and sales in Africa in the past through his own consultancy business.

The team now wants to hire someone to lead the European effort. Ideally that person would have experience in Europe’s agri investment market but understanding that pool is still small, someone with experience working in alternative investments, perhaps with a CFA or ACA qualification, would be suitable.

“Most importantly we want someone with the character, drive and intellectual ability to lead the charge into Europe and be part of a growing team,” said Cairns.

The firm is also recruiting for an assistant to help work on the African side of the business.

Coghill has been working with an agricultural investment consultant in Australia for around two years but now wants to formalize that relationship in a deal that could result in a joint venture. The firm is also in talks with similar businesses in the US and South Africa, he added.

Professional and realistic farmland valuations are in short supply, according to Cairns and Coghill who want to raise the bar in this area globally.

“Valuing land purely based on comparisons with other farmland is not suitable for the international market, especially in the emerging markets where viable comparables do not often exist,” said Cairns. “Valuers therefore need to employ all the methods available to them before weighing up the evidence and taking a view. Even in the developed markets where comparables do exist, one needs to consider that the investment buyers who dominate the market are assessing assets on a yield and return basis and therefore a valuer or advisor needs to do the same.”

And this emphasis on investment returns means that Savills’ expertise extends into enterprise valuations which will be increasingly necessary as the agri investment market develops and investors decide to sell their assets or even perhaps list them, said Cairns.

“There are some expectations among the pension fund industry that agri investments can return 20 percent but this is rarely possible and we hope to bring a level of realism to the market but also confidence in the valuations we provide,” he said.

“There are still some expectations among the fund industry that agri investments can return in excess of 20 percent each year,” he said. “While this is possible for fully developed, top performing scale assets, there is a lot of capital, time and management that needs to go into the farm to get top returns. As an advisor in this market we hope to bring a level of realism but most importantly the understanding, credibility and transparency that is essential to give confidence to transact and manage assets in this market.”