Savills Global Farmland Index records exceptional annual growth of 18% for 2024, the strongest performance for global farmland since 2021. According to the Global Farmland Index, the greatest increase was for the South America region at 47%, largely driven by increased international attention and currency movements. This was followed by Central Europe with a 10% average increase.
By comparison, five years ago, the Savills Index recorded a 1.6% decrease in global farmland value growth, attributed to a stronger US dollar that exaggerated value movements downward. Australia reported the largest growth with a value increase of 10% . South America struggled with volatile currencies and political instability, resulting in a decade of declining farmland values until 2022 when the market began to stabilise.
The recent Savills publication Spotlight: Global Farmland indicates that the farmland market is gaining prominence as a critical asset class and demand is increasing for crops aligning with global health megatrends.
Nicola Buckingham, associate director in Savills research, commented: “We have seen exceptional growth for the farmland market and interest in the sector is continuing to grow with global health trends helping drive demand. Over the past 22 years, farmland has delivered stronger and more stable returns than other assets and investors are recognising the vast opportunities in the sector.”
Investing in tree crops
Within this global landscape, tree crops are attracting increased attention. Demand is expected to continue to rise due to health megatrends and a shift in food consumption habits.
In the UK, tree crops represent a small portion of total agricultural output, with the primary crop by area being apples. However, in different climates, a greater variety of tree crops can be grown and provide very attractive returns to investors, generating up to 2,000% higher per-hectare-revenue (using wheat as a benchmark).
Jonny Griffiths, head of international farmland at Savills, adds: “Farmland has seen a long-term value growth and stability compared to other commodities, like oil and gold, which are more volatile. This is largely due to the fact that farmland is not frequently traded and landowners make decisions with a long term outlook.”
“We’ve seen a surge in demand for tree crops, which are capable of producing multiple harvests and sustain productivity for 25 harvests or more. Tree crops provide higher sales and revenue than annual crops, signalling their high value and a consideration when choosing where to invest.”