A farmland investment vehicle said it was preparing a £200million float on the London Stock Exchange today as investors turn to farmland amid global supply shocks eating.
The Sustainable Farmland Trust, which invests in US farmland, said today it was considering placing 200 million ordinary shares on the stock exchange at an issue price of £1 per share.
The trust is set to be the first dedicated farmland investment vehicle on the exchange and comes as money pours in to bolster the global food supply chain in the wake of the war in Ukraine.
In a statement released today, company chairman Andrew Crossely said the company was well positioned to deal with the pressures weighing on the global economy.
“We believe the company is perfectly positioned to deal with current inflation.
environment, with exceptional risk-adjusted economic returns while providing a sustainable and appropriately managed food source,” he said.
“We believe this unique and highly scalable asset class has enormous potential to deliver long-term returns from a combination of income and capital growth that historically outperforms more in an inflationary environment.”
Investment trust chiefs said it would offer access to a portfolio of farmland across 11 properties with more than 30,000 gross acres in seven US states, growing 20 different types of crops.
The Core Fund has an unaudited net asset value of $232.75 million at the end of June, the company said.
Farmland was proving an attractive bet for investors in the wake of the war in Ukraine, analysts said today.
“The war in Ukraine has pushed food prices up around the world, so investors are eager to find ways to play on that trend,” said Russ Mould, chief investment officer at AJ Bell.
“Fertilizer and farm equipment companies have been natural places for investors, with farmers under pressure to increase crop yields.
“The next logical place is to look at farmland as an investment, and that’s the premise behind The Sustainable Farmland Trust which hopes to raise £200m to invest in US land.”