By Charlie Conchie
A farmland investment vehicle has revealed plans for a £200m float on the London Stock Exchange today as investors look to agricultural land amid global food supply shocks.
The Sustainable Farmland Trust, which invests in US farmland, said today it was looking to place 200m ordinary shares on the exchange at an issue price of £1 per share.
The trust is set to be the first dedicated farmland-focused investment vehicle on the exchange and comes as money flows into shoring up the global food supply chain in the wake of war in Ukraine.
In a statement today, chair of the firm Andrew Crossely said the firm was well-placed amid the pressures battering the global economy.
“We believe that the Company is perfectly positioned for the current inflationary
environment, with outstanding risk adjusted economic returns while also providing a sustainable and appropriately managed food source,” he said.
“We believe this unique and highly scalable asset class has enormous potential to provide long-term returns from a combination of both income and capital growth that historically outperform further in an inflationary environment.”
Chiefs of the investment trust said that it would offer access to a portfolio of farmland over 11 properties with over 30,000 gross acres in seven US states, producing 20 different crop types.
The Core Fund has an unaudited net asset value of $232.75m as aof the end of June, the firm said.
Analysts said today farmland was proving an attractive bet for investors in the wake of war in Ukraine.
“The war in Ukraine has pushed up food prices around the world, so investors have been eager to find ways to play this trend,” said Russ Mould, investment director at AJ Bell.
“Fertiliser and agricultural equipment companies have been natural places for investors to look, with farmers under pressure to increase crop yields.
“The next logical place is to look at agricultural land as an investment, and that’s the premise behind The Sustainable Farmland Trust which is hoping to raise £200 million to invest in US land.”
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