Gold Magazine April - May 2013, Issue 25 | Página 69

tion of the county’s fiscal problems. Huge
debt and budget deficits – and the political
wrangling that goes with them – still hang
over America. And this is the rub for many
developed countries where debt issues and
political uncertainty dominate the landscape, undermining investor and business
confidence.
Tullett Prebon, a leading money markets
firm, recently emphasised that European
economic and currency woes are far from
resolved. In a piece entitled The Gift that
Keeps on Taking, Tullett said, “For us, traditional stocks and shares are still ‘the gift
that keeps on taking’ and the reason why
we remain firmly focused on a broad range
of alternative assets.”

Farmland - a ‘Must
Have” Asset Class

“You have to buy in a place where it rains,
and you have to have a farmer who knows
what he’s doing. If you can do that, you will
make a double whammy because the crops are
becoming more valuable.”
We have been quoting Jim Rogers,
Chairman of Singapore-based Rogers
Holdings, for some time and see no reason
to stop doing so. Farmland is the only
property sub-sector that continues to show
inflation-beating gains on capital and
income just about anywhere in the world.
The need to produce more food for the
world’s rising population continues to put
pressure on farming assets and prices for
soft commodities.
In its most recent annual report
(International Farmland Focus 2012), land
agent Savills states that the global farmland
index (averaging prices around the world)
rose from 100 in 2002 to over 500 by the
end of 2010, with no sign of prices falling
in 2011-2012. Indeed, in regions such as
central Europe, Latin America and Africa,
prices are rising by well over 10% a year –
by 24% in Argentina last year for example.
Savills also highlights Australia, noting an
average 15% rise in land values in 2011.
While it has no detailed information
for much of Africa, its report provides
information on selected countries which
shows that land prices there remain cheap
in comparison with other parts of the
world. Savills also notes that “since 2000,
62% of the large-scale land acquisitions
were located in Africa”.

Against that background, Alternative
Global Solutions (AGS) offers a
geographically wide range of farm
investments from Africa to Australia. In
Africa our chosen project continues to
progress its major rice farming venture,
with income returns averaging 14%.
Investment is simple and starts from
£11,250 per 5 acres (including £600
cultivation fee per acre). There are no
other ongoing charges. Investors receive
a 49-year lease on their plots under a
legal system based on British law. The
project itself provides many local benefits
to the local community: a share of the
harvest, employment, rent, education and
healthcare support. An endorsement from
the High Commissioner for Sierra Leone
in the UK reflects the project’s successes
locally and underpins government support
for the business and its investors.

Australia

“Western Australia’s commercial wheat belt
is worthy of a closer look when considering
where to acquire land internationally,” says
Savills. The agent’s report highlights many
reasons for the country’s attractiveness to
investors: its proximity to Asia, excellent
infrastructure, and a highly efficient arable
sector. The country also has a relatively
low cost of acquisition to produce a tonne
of grain in comparison to other grainproducing regions globally and a strong
historic economic track record.
AGS’s chosen offering is for investors to
acquire a 40-year lease on 3-hectare plots
costing £9,000 in Western Australia’s
wheat belt, in an area where the local shire
government describes itself as having “an
abundance of water”. The land has been
surveyed and assessed by one of the leading
agriculture consultancies in the region, and
is deemed to be “highly suitable for high-

The average price of
a hectare of land in
North America last year
was US$7,400 and over
US$22,000 in Europe
yield wheat production. The
purchase price includes all set-up
and ongoing management costs.
Western Australia’s land values rose
by 11% in 2011 (Savills) and are predicted
to continue to rise. Given the bullish
forecast for this part of the world, and the
past history of rising capital values, AGS
is confident of substantial gains over short
to medium investment periods. In fact
the anomaly in the prices of arable land in
Australia versus prices in other developed
countries is vast. For example, the average
price of a hectare of land in North
America last year was US$7,400, and over
US$22,000 in Europe and you can well
pay more for prime arable land that is
needed to grow wheat. Moreover, these
prices take no account of development and
ongoing farming costs.
Western Australia has an exemplary
developed economy, a secure legal system
and a quality support infrastructure and
it is one of the few economies that has
continued to grow throughout the financial
crisis and to maintain stable government
finances. In addition, Australia has welldeveloped export relationships with the
rest of the Asia-Pacific region and a strong
currency that is likely to stay strong.
At AGS we approve only what we
consider to be the very best of projects for
distribution to our client base. Only after
a strict due diligence process is carried out
and track records from project managers
and the land itself have been checked
do we approve any farmland project for
promotion. During 2013 AGS, through
exclusive arrangements with its global
partners, is able to offer market leading
investment opportunities in: wheat
farming, timber, green oil, forestry, rice
farming and many more.
In next month’s issue of Gold, Steven
Newbery will be looking at the sector which
has delivered both the highest growth and
highest yield returns within the commercial
property sector over the last decade: Self
Storage.

info: Steven A. Newbery is the Director of Alternative Global Solutions Ltd. [e-mail]
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