DAB advises and assists institutional investors looking to invest in German agricultural land. Our objective is to create investments that are safe and successful in the long term. DAB supports its clients, from the selection of appropriate assets to the structuring of the entire process and to the final implementation of the transaction.

Extensive experience

Based on its extensive transaction experience, DAB is able to develop various holding structures, taking account of the existing statutory restrictions set forth in the Real Property Transactions Act ("Farmland in Farming Hands"). DAB provides practical and proven solutions.

Maximum transaction safety

Transaction safety is the most important aspect of all our advice. At the evaluation stage, DAB supports clients with its extensive knowledge of all potential investment options. DAB structures various investment scenarios and, together with its clients, develops the optimum strategy for an investment in German agricultural land.

Extensive portfolios of land

DAB is in close contact with owners of extensive portfolios of land. In addition, DAB also provides advice on the acquisition of large areas of land in the new Laender owned by the Federal Republic of Germany and earmarked for privatization.

Agriculture - the industry of the future. Agricultural products are in high demand worldwide. Increasing wealth, even in emerging countries, a steadily growing global population, as well as the trend towards alternative energy sources all combine to produce a growing demand for foodstuffs and agricultural commodities.

Growing demand for agricultural land

At the same time as demand for agricultural land is growing, however, the amount of arable land available per capita is continuously decreasing. While in 1970 there were still 3,800 square meters available per capita, in 2015 the figure was only around 2,000 square meters.

Despite increasing efficiency and productivity in modern agriculture, through high-tech machinery or optimized crop rotation, for example, this decrease in available land is a global trend that cannot be halted.

As a result, the demand for agricultural land is growing exponentially, leading to increasing land prices. This has been particularly marked in the development of land prices in Germany over the last 15 years. According to market indicators, this trend is set to continue in future.

Average purchase value per hectare of agricultural land sold Source: Federal Statistical Office, Series 3, Series 2.4, 2014

Diverse opportunities for investment

In Germany, there are a number of excellent opportunities for investment in agricultural land, many of which have not yet been fully exploited. More than 80% of Germany's territory is currently used for agriculture and forestry. By contrast, only 13% is used for traditional property investments (i.e. commercial and residential property and public areas).

More than 300,000 hectares that previously belonged to agricultural production cooperatives (LPG) in the GDR are currently held by the federal government and are required, by law, to be privatized over the course of the next few years. In 2014 alone, more than 33,000 hectares from this portfolio were privatized.

DAB supports its clients through every stage of their entry into this market with its major investment opportunities. Based on relevant experience, the team at DAB is in the ideal position to overcome any obstacles (including statutory impediments) that have hitherto discouraged those from outside the farming community from investing in this highly attractive asset.

German agricultural land offers attractive options as an asset class. As well as safe, steady returns from leasing the land, historically, growth in the value of agricultural land has been seen even during times of economic difficulty.

Agricultural land provides safe, stable returns
  • Regular market returns (in the form of rental income) of 3% to 5% of the purchase price in sale-and-leaseback models are secured in the long term.
  • Additional returns can be realised through capital appreciation of agricultural land (currently approx. 6% to 8 % p.a.)
High EU subsidies for cultivated german agricultural land

The cultivation of German agricultural land is encouraged through EU law, with various bonus models intended to boost the attractiveness of agriculture. In 2014 alone, German farmers received direct payments of approximately EUR 6.2 billion.

Arable land - a rare commodity

Land cannot be increased, making agricultural land an extremely limited resource which is further under pressure from the rapidly growing global population, advancing urbanisation and changing eating habits.

The superior property investment

In contrast to traditional “concrete gold”, what sets agricultural land apart is that it does not involve maintenance expenses and modernisation. Furthermore, the issue of “vacant plots” does not apply to the agricultural sector, since food is - and always will be - in demand and agriculture is the main provider for the global population. In addition, modern, sustainable land management ensures year-round use of agricultural land.