Globally we expect the demand for productive farmland to increase. Submit your resume for future opportunities. Agcapita investors commit for five years. We want to capture farmland returns in the least volatile way possible," Mr. Johnston says. If agriculture funds are still relatively small in Canada, it may be because of their lack of liquidity, the difficulty in explaining the concept and the dearth of representation by investment advisers at the major brokerage firms. ‘When we get calls from investors, they are looking for diversification and stability,’ says Joelle Faulkner, chief executive officer of Area One Farms, which uses a partnership model to invest in farmland. Most investors buy into a limited partnership or purchase land and have it professionally managed. Its sixth fund, the Agcapita Farmland Fund VI, is still open to new investors who qualify as accredited under provincial securities rules. We acquire and lease farmland, seek willing and able farm tenants who intend to own, and connect community-based investors to local food economies. 351 King Street East, Suite 1600, Toronto, ON Canada, M5A 0N1, Just $1.99 per week for the first 24 weeks, var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o? It has a 5-per-cent hurdle rate for institutional investors but none for retail. 28 September 2020, Rural The value of farmland has risen steadily over the past 5 years and the race is on to gather up arable land – either to farm it or for development. ", They also understand land. Either way, consider farmland. The amount of farmland in Canada is limited and more is being lost to development every year. We’re a community-based farmland investment company built by farmers, for farmers, restoring access to farmland for the next generation and revitalizing our local food economies. Some advisors are less than enthusiastic. This farmland is used for a wide range of agricultural purposes, and all of it produces revenue. Says Craig Machel, a portfolio manager at Richardson GMP who specializes in alternative investments: "It's not that I don't like [agricultural funds], although maybe that is the case because the strategies I have seen are not so private-client-friendly, in my view. What survives will become more valuable. For buyers of overseas farmland, finding the right opportunities, and demonstrating the effectiveness of management protocols for long-term sustainable returns, is key. That means: Comments that violate our community guidelines will be removed. We understand that our most valuable resource is our people. That represents nearly 900 million acres of farmland, according to the U.S. Department of Agriculture. We aim to create a safe and valuable space for discussion and debate. 15 September 2020, All content © copyright 2020 Savills Inc., Brokerage. Sixty-five per cent of the firm's capital comes from institutional investors such as family offices, wealth-management firms for high-net-worth investors. In highly productive parts of Canada such as southern … "We're targeting 12 to 14 per cent a year but we have to sell" to achieve that. As populations grow and productive farmland becomes scarcer around the world, Canadian farmland will only become more desirable and valuable. After years of hard work, you've sold your business and are looking to invest for the long term. Readers can also interact with The Globe on Facebook and Twitter . "remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }, What the rich can teach us in these turbulent times, How TD Wealth’s former chief portfolio strategist invests his money in retirement, Money can buy happiness – or at least a good story to tell later, Four qualities the wealthy look for when seeking out advisers, Real-estate hot spots draw the world’s affluent, A worry for the wealthy: keeping cash from children’s ex-spouses, The secret to paying less tax in retirement, Due to technical reasons, we have temporarily removed commenting from our articles. 21 October 2020, Food and Farming March 17, 2020 A message from Savills North America's Chairman and Chief Executive Officer. At the end of 10 years, the properties are sold, ideally to the farmers, investors are paid out and the fund is wound up. Area One Farms uses a partnership model in which investors and farmers both put up money to acquire properties in which they will be co-owners. The market attracts interest from governments, government-backed investment funds and private investors. Like any alternative investment, buying farmland comes with hefty fees. This is a space where subscribers can engage with each other and Globe staff. At Area One Farms, "the tricky part is we don't have actual returns yet, because we haven't sold anything," Ms. Faulkner says. The company has already exited from its first two funds, which produced attractive returns. The 15 countries are Argentina, Australia, Brazil, Canada, Denmark, France, Germany, Hungary, Ireland, New Zealand, Poland, Romania, United Kingdom, United States and Uruguay. Agcapita, in contrast, does work through investment advisors. Savills Plc is listed on the London Stock Exchange within the FTSE250 index. Stephen Johnston, founder of Calgary-based Agcapita Partners LP, does things a little differently. Because Canadian farmland represents good value, Mr. Johnston says. "We had to give them the kind of security they needed to want to work with us. -High prices for commodities such as soy beans, canola, and corn If you’re interested in the investment potential of Alberta farmland, contact Fred Mertz and his team at Farming Families in Calgary. Most of the return came from land-price appreciation, with only about two percentage points from net rentals. If you are looking to give feedback on our new site, please send it along to, To view this site properly, enable cookies in your browser. To view this site properly, enable cookies in your browser. "Those clay belts end up being really good soil.". Up-to-date developments and news from the Canadian commercial real estate industry. It is trading at a discount to global farmland based on a measure he likens to a price/earnings ratio on a company's stock: productivity cost, or U.S. dollars per tonne of wheat produced. Indeed, farmland has occasionally fallen in value. Surveying the land you own a share of, and talking crops with your farmer partner, might just be as close to real farming as many investors care to get. We hope to have this fixed soon. Area One Farms charges an annual 1.5 per cent a year on invested capital (debt and equity at cost).
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