As the world's population grows and the global middle class becomes more affluent, the demand for high-quality agricultural products also increases. At the same time, available agricultural land is decreasing worldwide due to land sealing - this makes land an attractive long-term investment.
Agriculture combines the advantages of an inflation-protected tangible asset with ongoing cash flows from cultivation or leasing and complements any portfolio as a diversifying anchor of stability with an attractive risk/return profile. In addition, owning land opens up opportunities to realize renewable energy projects and thus significantly increase sources of income.
Agriculture is one of the oldest, yet most forward-looking forms of investment. It combines real values with sustainable use and offers both private and institutional investors stable and long-term earnings opportunities.
Salm Global Land invests specifically in arable farms. Depending on the location and investment strategy, these are either managed operationally or leased on a sustainable basis. Our aim is to secure the long-term profitability of the land and develop additional sources of income, for example through the use of wind and solar energy. When selecting suitable investment locations, we attach particular importance to the following criteria:
Successful long-term investments in agricultural land use High degree of legal certainty and Property protection in the target country. As the investment horizon is usually at least 15 years are Stable, clearly defined property rights of central importance. Regions with inadequate legal certainty, weak property protection, Corruption or political instability are consistently excluded.
High legal certainty offer above all locations in Central and Northern Europe, North America and Oceania, parts of South America, Africa and Eastern Europe due to political risks and weak property protection are classified as unsuitable.
For agricultural investments, the Climate of a target region is a key factor, as it directly Yield, stability and Performance influenced. Fertile soils, a Stable water balance, Sufficient and reliable precipitation and Favorable temperatures secure High yields in the long term and receive the Soil quality. Therefore, before an investment decision is made, all climate-relevant parameters be carefully examined: natural soil fertility, groundwater level, precipitation distribution, Seasonal temperature curves and the risk extreme weather events. It is also necessary to assess how potential Climatic changes - about longer dry periods or Changed vegetation cycles - to the Form of management and Productivity could have an impact.
Very good to optimal agricultural growing conditions are found particularly in the core regions of US agriculture (e.g. Corn Belt, northern Great Plains), in selected regions Central and Northern Europe with high soil quality and in Oceania (coastal regions of Australia and large parts of New Zealand). Parts of South America offer Excellent climatic conditions, but are often characterized by Legal and political risks limited.
A Developed and stable sales market is crucial to the success of agricultural investments. Attractive target regions offer both a strong domestic market with high local demand as well as access to international export markets. Marketing should be based on a broad customer base to avoid dependencies on individual buyers or sales channels.
Advantages are Transparent market structures with comprehensible Pricing and a well-established agricultural Value chain. Regions such as North America have a very large and liquid domestic market, while countries such as Australia and New Zealand are export-oriented and benefit from their proximity to high-growth markets in Asia. In Europe, the strong domestic market ensures Stable sales opportunities, even though the prices are high due to Regulation and Subsidy structures can be influenced.
By contrast, markets in large parts of Africa, South America and Eastern Europe are often fragmented, less transparent or dominated by a small number of customers, which Price volatility and Sales risks increased.
The Entry price for agricultural land is a central factor for the Long-term profitability of an investment. Attractive locations are characterized by fair, market-driven land prices in one transparent and liquid market environment from. Regions with highly inflated prices - as in parts of Western Europe with illiquid markets - entail the risk of limited potential for value appreciation and longer amortization periods.
Before an investment decision is made, the Historical and current price trends of the regional land market in detail in order to Avoid overvaluations and Markets with attractive valuation levels to identify. Opportunities often arise in phases of economic or climatic stress, when owners have to sell land under liquidity pressure.
Attractively priced and at the same time stable are often core regions of the US agriculture, East Germany and parts Oceania. Markets with non-transparent pricing, political uncertainty or restricted market access - such as in large parts of Africa, South America or Eastern Europe - harbor increased risks.
One Well-developed infrastructure is for the Success of agricultural investments of central importance. It ensures that products are transported efficiently from the field to Processing plants and End markets and that Operating resources, Machines and Services are reliably available.
The decisive factors include a Dense and resilient road network, good Connection to ports or Rail transport, modern Storage and processing facilities and a functioning Logistics chain. Equally important is the availability qualified workforce and more specialized Service provider in agriculture upstream and downstream.
Regions like North America, Oceania or Northern Europe have Highly professional structures, that have a smooth production and marketing process enable. In many parts Africa, South America or Eastern Europe In contrast, the infrastructure and service network are often insufficiently developed, which can lead to higher costs, longer transportation times and a potential loss of quality.
In the new federal states, the retirement of the „reunification generation“ opens up the opportunity to acquire large-scale, established farms. Our focus is on the acquisition and long-term management of these farms. We take over the local management and active management of the farms with a focus on market crop cultivation. The aim is to sustainably build up efficient operating units with regional roots and stable cash flow.
A particular focus of our management is on the development of renewable energy projects on suitable sites.
The USA has the largest and most transparent land market in the world. It offers the opportunity to build a diversified, high-quality land portfolio. Local farmers are actively seeking external capital and we are taking advantage of this environment to make targeted investments. Our strategy: Through our local presence, we promote the acquisition and long-term management of arable farms between the Lake States and Arkansas. We rely on economically strong management and close cooperation with experienced farmers, to whom we lease and actively support the land.
Australia has very different climatic conditions due to the size of the country. This leads to very diverse agriculture and includes the cultivation of traditional cash crops such as wheat through to specialty crops such as nut or fruit trees. This is always combined with a highly efficient use of water. We use this environment to diversify larger portfolios and build visibility in the demand markets of Oceania/Asia. To this end, we cooperate with experienced farmers to whom the land is leased and support them in its management. In Australia, the coastal regions of Western Australia, New South Wales, Queensland and Victoria are of particular interest.
