BPT to invest in farmland in Eastern Europe
26 June 2008
In recent years, many investors have
looked to the emerging east for new and attractive growth
potential. Most investments have been in equity or classic real
estate, including the BPT funds. A desolate few have tried farming,
often with considerable risk and a high degree of complexity. This
is about to change.
Through a new investment concept, BPT
Farmland S.A., BPT is offering investors a unique opportunity to
combine farming with a classic, transparent real estate investment.
Acquisitions will be made in the "new" EU countries, Russia and the
Ukraine with a focus on corn production.
"Being a sizable investor in the
Baltics and Russia we are often offered attractive farmland but
have not been able to do anything about it until now," says Stig
Mølsted-Møller, managing director of BPT's investment company.
Land appreciation and
increasing food prices
BPT Farmland has significant growth potential. The price
of land in Eastern Europe is down to a tenth of prices in the rest
of Europe. This is expected to change as land prices converge to
European standards, a development we are already seeing in Poland
and the Baltics. In addition, rising food prices have led to an
increased need for new outlets to supply the world market, and
Eastern Europe has the potential to fill the gap. Land appreciation
and rising food prices in combination with Danish farming know-how
create a unique investment opportunity.
"The idea behind BPT Farmland is quite
simple. The fund will purchase farmland in Eastern Europe, cluster
it and subsequently lease it to a farm company. By separating land
ownership from farming operations both risk management and
transparency is significantly improved compared to traditional
agricultural investments," explains Stig Mølsted-Møller.
Lack of financing is holding
back East European expansion
So far, investors have had only limited access to
agricultural investments, which has held back development of the
sector. Through BPT Farmland, investors are offered direct access
to investment in attractive farmland with a high return potential
wrapped in a traditional real estate investment fund.
BPT Farmland expects to yield an annual
return of 10-15% including 5-7% in dividends. The first
acquisitions have already been identified.
Efficiency through Danish
know-how
As part of the fund setup, BPT has secured Danish farming
knowhow through FaMaCo, a newly established company that will
handle the operational side of farming the land. The collaboration
is to ensure high productivity and efficiency.
"Danish farmers are among the most
efficient in the world. Their knowledge on farming is in strong
demand and when applied to Eastern European conditions it can raise
productivity dramatically. We have already seen this in Poland,
Russia and the Baltics," says Stig Mølsted-Møller.
Where East European farms today produce
around 2-4 tons of grain per hectare, Danish farmers are producing
8-10 tons per hectare. By introducing modern production methods not
only will the profit from operations increase, so will the value of
the land.
Ulrik Theophil Jørgensen, who heads
FaMaCo, is one of the leading Danish farmers today. His expertise
combined with the knowledge of the local BPT teams will make up the
core of the fund.
For more information please
contact:
Managing Director, Stig Mølsted-Møller
+45 23 28 05 05
Fund manager, Ulrik Theophil Jørgensen
+45 23 96 60 00
Materials for download:
Press release
in Danish
Fund
description in Danish
Fund
description in English
