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Agcapita Farmland Fund - Sask Farmland Values Up 9.1% in First Half of 2012
Agcapita Farmland Fund - Sask Farmland Values Up 9.1% in First Half of 2012
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Agcapita Farmland Fund - Sask Farmland Values Up 9.1% in First Half of 2012

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Agcapita Farmland Fund is pleased to report that Farm Credit Canada ("FCC") confirms another strong return performance for Canadian farmland. According to the FCC Farmland Values Report, the average …

Agcapita Farmland Fund is pleased to report that Farm Credit Canada ("FCC") confirms another strong return performance for Canadian farmland. According to the FCC Farmland Values Report, the average value of farmland in Saskatchewan increased by 9.1% during the first half of 2012.

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  • 1. Agcapita Farmland Fund is pleased to report that Farm Credit Canada ("FCC")confirms another strong return performance for Canadian farmland.FOR IMMEDIATE RELEASE, ATTENTION INVESTMENT EDITORS – October 14,2012 - CalgaryAccording to the FCC Farmland Values Report, the average value of farmland inSaskatchewan increased by 9.1% during the first half of 2012. The FCC reportsthat"The latest increase is part of a trend that shows farmland values have beenrising in the province since 2002. In the two previous six-month reporting periods,farmland values increased by 10.1% and 11.6%, respectively. In comparison, theaverage value of Canadian farmland increased by 8.6% during the first sixmonths of 2012, following gains of 6.9% and 7.4% in the previous two semi-annual reporting periods. Farmland values remained the same or increased ineach province except British Columbia. Ontario experienced the highest averageincrease at 16.3%. “High-quality farmland suitable for specialty crops continuedto be in strong demand,” says Michael Hoffort, FCC Senior Vice-President ofPortfolio and Credit Risk. “Consolidation of farms in some provinces is anongoing trend as producers seek to increase their land base and take advantageof efficiencies.”"Stephen Johnston, founder of Agcapita reports that "Farmland continues toappreciate as we predicted when we launched our first fund in 2008. We believethat strong agriculture commodity prices and expansive monetary conditions aresupporting valuations globally but more interestingly, Saskatchewan appears tobe closing the price gap with its neighbors and generating even higher rates ofreturns than Canadian farmland investments in general. We believe this is ademonstration of a margin of safety factor in Saskatchewan farmland which wefind so compelling as investment managers. With capital raised in our 2012offering, Fund III expects to be able to add up to 10,000 additional acres to theoverall Agcapita portfolio. We continue our model of using minimal to no leveragefor acquisitions in keeping with a commitment to risk mitigation."Agcapita’s series of farmland funds continue to show great appeal toconservativeinvestors concerned with inflation and the volatility of their existing public equityinvestments. Farmland has similar inflation hedging qualities to gold but with anongoing cash yield that gold lacks. Farmland returns exhibit low volatility and thiscombined with the high absolute returns from farmland equate to a favorableSharpe ratio. Agcapita’s funds directly hold diversified portfolios of farmland inwestern Canada, and in particular in the highly price competitive province ofSaskatchewan. Investors are provided with the comfort of a direct investment infarmland combined with a model of front-end loaded cash rents. Agcapita is partof a family of alternative investment funds with a focus on generating commodity-
  • 2. linked returns. Agcapita believes farmland is a safe investment, that supply isshrinking and that unprecedented demand for "food, feed and fuel" will continueto move crop prices higher over the long-term. Agcapita is one of Canadas mostexperienced farmland fund managers, launching its first fund in Q1 2008.This news release may contain certain information that is forward looking and, byits nature, such forward-looking information is subject to important risks anduncertainties. The words "anticipate," "expect," "may," "should" "estimate,""project," "outlook," "forecast" or other similar words are used to identify suchforward looking information. Those forward-looking statements herein made byAgcapita, if any, reflect Agcapitas beliefs and assumptions based on informationavailable at the time the statements were made (including, without limitation, that(i) the demand for agricultural commodities will continue to grow at a pace that isunlikely to be matched by growth in agricultural productivity, and (ii) investmentdemand for tangible assets such as agricultural commodities and farmland willcontinue to increase for the foreseeable future). Actual results or events maydiffer from those anticipated or predicted in these forward-looking statements,and the differences may be material. Factors which could cause actual results orevents to differ materially from current expectations include, among other things:risks associated with the ownership and operation of farmland, includingfluctuations in interest rates, rental rates and vacancy rates; general economicconditions; local real estate markets; supply and demand for farmland;competition for available farmland; weather; crop diseases; the price of grain andother agricultural commodities; changes in legislation and the regulatoryenvironment; and international trade and global political conditions. Readers arecautioned not to place undue reliance on any forward-looking informationcontained in this news release (if any), which is given as of the date it isexpressed herein. Agcapitas undertakes no obligation to update publicly orrevise any forward-looking information, whether as a result of new information,future events or otherwise.

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