Value of French farmland likely to soar
Investors throughout Europe are looking at the different asset classes in dismay. Stocks and shares
offer a rollercoaster ride with many experts predicting substantial drops in value, property markets
appear weak in most countries (look at the problems in Spain for example) and even the highest
paying deposit accounts offer a measly return.
However, there is one area that seems to stand alone at the moment and it’s clear that the smart
money is in agreement.
Farmland.
2012 has seen the price of UK farmland rise yet again (0.4% in the first three months) and the well
respected research team at Knight Frank have just announced that they are expecting further rises
throughout the year. This means that in one of the toughest economic times for centuries farmers
are having to pay record amounts for the land they need.
The average value of agricultural land in the UK is currently £6,073 an acre or £15,182.50 per
hectare. At an exchange rate of 1.24 euros to the pound that equates to over €18,800 per hectare.
Where the UK leads, France often follows and it is interesting to compare these values to agricultural
land prices here in France.
SAFER figures show that untenanted farmland on this side of La Manche cost an average of €5,430
per hectare last year - that's almost one third of the price! Leggett Immobilier are currently
marketing over 100 working farms (of all types and with or without farmhouses) for sale across
France and have seen a steady and growing increase in interest from across the channel.
I saw a farmer quoted recently as saying that farmland is a "safehaven" and that "the world's
population is growing and that people will always need more food". Add in the fact that it is also tax
efficient and undepinned by EU subsidies and it's no wonder that farmland is an attractive choice for
investors - I simply believe that it's even more attractive in France. The price of English farmland has
rocketed by more than 10,000% in the last 60 years and France certainly gives farmers a cheaper
(and sunnier) option.
There are, of course, some reasons not to invest in farmland. It requires a fair chunk of money in the
initial investment and it requires specialist knowledge in order to manage it properly. This means
you either need to rent the property out to a farmer, or leave city life behind you, put on your
wellies and head out to the country for the good life. If you include the fact that good farmland is
often difficult to find and things start to get complicated.
However, I believe that there are four good reasons why this is the perfect time to take the plunge.
Firstly it is (literally) an attractive long-term investment that offers an immediate income. Secondly
you can throw in a dose of capital appreciation, thirdly it is a sure fire hedge against inflation and
finally it has always been counter cyclical when considered alongsiode traditional asset classes.
It is estimated that by the year 2050, there will be between 9 and 10 billion people living on the
planet all whom will need to be fed. At the same time, valuable resources (mainly land and water)
are being irreversibly destroyed by urbanization and general pollution. As Mark Twain so famously
said “Buy land, it’s the one thing they don’t make any more”. Even investment king George Soros
has been snapping up land lately citing a rising demand and shrinking supply as his rationale.
Here at Leggett Immobilier we have a huge variety of farms and farmland for sale throughout
France. Ranging from working farms and vineyards, through derelict and abandoned tumbledown
farmhouses to just the land itself.
Vineyards are certainly at the most prestigious end of the farmers scale. Many of us have sat at our
desks, peering out at the grey sky and wondered what it would be like to own and run our own
vineyard and serve our own label wine to family and friends (as well as sell it to the general public).
We are selling a magnificent vineyard property in the Périgord, just thirty minutes from world
famous St Emilion. It would perfectly suit those in search of a picturesque wine estate with income
potential.
The estate includes 28 hectares of land with 18 hectares of vines. There are mature gardens with
beautiful ancient trees, meadows, paddocks for livestock and views beyond of vines, fields and
woodlands. The house itself has 12 bedrooms and nine bathrooms and offers a total of 390m2 of
habitable space, it would make a most comfortable family home.
The owners are asking €1,590,000 and the estate is surrounded by some of the most beautiful
countryside and prestigious vineyards in SW France. This is a well know vineyard and it produces
wines under two Château labels (AOC: Bergerac Superior and Haut Montravel) which include red
wines, rosé, both dry and sweet white wines as well as a traditional method sparkling wine.
Staying in Aquitaine the old farm near Bazas offers an income both from the land and from the
properties on it. It has a beautiful, old house with 23 hectares of prairies and woodland close to the
historical town of Bazas. The property is currently used as three separate houses and is absolutely
perfect for a small gite business to complement the farm itself. Our agent in the Gironde is
marketing the house for €614,800 and says that with famous surrounding villages such as St Emilion,
and areas such as the Medoc, Sauternes, Graves, and Entre-Deux-Mers to explore, it has been
described as “like driving through a wine list”.
If diversity is what you are looking for we are selling a 42 hectare working farm in the Herault for
€1,890,000. The possibilities are endless for this wonderful property in the Minervois. It is currently
used as part organic vineyard, part arable land and part pine wood. It has views over the Pyrénées
and La Montagne Noire and the picturesque setting is just four kilometres from Minerve, designated
'One of the Most Beautiful Villages of France'. In the stone-built farmhouse there are marble
fireplaces and the original decorated tile flooring; also the original windows and doors, even
wallpaper from the 1930s! There are four bedrooms in the farmhouse, and two in the smaller house
which sits next to it.
For those who are willing to work on the farm buildings themselves then we have an excellent
opportunity in the Charente, the second sunniest area of France. It is a potential cattle or sheep farm
on 102 hectares of land which already attract subsidies of over €25,000 pa. The farm buildings are
made up of three houses in need of renovation , several stone barns and a modern 600m2 cattle
management unit. The farm has recently been reduced in price to €636,000 and sits within rolling
countryside.
Across the border in Haute Vienne we have a fully operating sheep farm on 30 hectares (plus 78
hectares of rented grassland) for sale. The farm, located about 12 kilometres from Le Dorat and from
Bellac (the sheep capital of France), comprises almost 100 % usable land plus a 3,000m2 pond and
excellent access tracks. The fields, which vary from 1 to 5 hectares, are efficiently fenced for sheep
and some have spring water. The holding is fully registered and is eligible for all EEC payments and
subsidies. This fully functioning sheep farm currently operates at about 650 units and has sufficient
quantities of cereals to be fully self sufficient. The asking price is just €583,000.
I hope that these few examples have given you a flavour of what is currently available. We have
plenty of other small-holdings that are also proving extremely popular with both local and
international buyers. The world is changing and many people see this flight towards land and self
sufficiency as both timely and prudent.
Trevor Leggett is Chief Executive of Leggett Immobilier, one of the leading international estate
agencies in France.
Phone: 08700 11 51 51 (from the UK) or +33 553 608 488 from elsewhere. Email
info@frenchestateagents.com