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Rural assets for opportunistic investors

Rural assets

For investors prepared to consider rural assets there are a number of options worth considering:

Romania

Once a frontier region of investment, the Romanian farmland market is maturing rapidly as many Western European and Scandinavian investors continue to see potential driven by current land values. The Romanian farmland market offers investors the opportunity to acquire high quality farmland at reasonable prices relative to the mature markets in Western Europe including the UK.

A number of farms have now reached a level of maturity where historical barriers to entry are no longer issues for new investors but provide opportunities for good investment returns. It is now possible to source quality assets with clean title in tradable structures with a strong performance track record, viable tenants, experienced operators and proper access to infrastructure.

Top-quality arable land values range from €5,000 to €7,500 per hectare and it is possible to buy scale. Value can be added where water storage is available, giving the potential to convert dry arable land into irrigated vegetable land. In addition, Romania's membership of the EU entitles it to Common Agriculture Policy (CAP) subsidies.

Energy Bureau service

Although food production is an important and often the primary use for farmland energy offers alternative opportunities to enhance financial returns. These include understanding energy usage and proactively taking control which can deliver a real competitive advantage, driving down energy costs and associated carbon intensity.

A professional, well thought-through Energy Bureau service is essential for property owners to understand energy data properly, providing reports on usage, managing tenant utility re-billing, and bill validation. As the saying goes, ‘you cannot manage what you can’t measure’. Bureau data management is the foundation on which other services, such as energy efficiency upgrades are based.

Energy storage

Energy storage is set to play an important role in our electricity networks and present new opportunities for property owners. Storage meets the need to balance variations in electricity demand and intermittent generation from renewable energy on an almost instantaneous basis. It offers commercial value for not only utility and transmission companies but also for end-users and property owners.

Numerous commercially driven projects are now appearing around the world, including commercial demand-charge management in San Francisco, distribution upgrade deferral in New York, part of an ambitious energy transition project in Germany and via the first commercial contracts awarded by the UK’s National Grid in August 2016.

Further information

Read more: Savills Global Real Estate Tips

 

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