Agrarian Trust

Czech Farmland Prices up 94% in Less than a Decade

From Bloomberg Businessweek by By and

Martin Burda gave up managing $8.1 billion of securities for something with better returns: dirt. In July he helped start Cesky Fond Pudy, the first investment company focused only on Czech farmland. Agricultural property in the Czech Republic, says Burda, “is among the least expensive in Europe, and it offers a conservative investor something that’s very hard to come by these days: safety and a good yield.”

Land values are rising as a result of the country’s soaring agricultural profits, which contrast with the stagnant Czech stock market and near-zero yields on government bonds. “Profitable farmers mean upward pressure on land prices,” says Burda, who was chief executive officer from 2009 to 2013 of Investicni Spolecnost Ceske Sporitelny, a unit of Erste Group Bank (EBS:AV), Austria’s largest bank.

He expects his fund to attract more than 200 million koruna ($9.6 million) in investments by October, up from 140 million koruna now. Avant Investicni Spolecnost, an investment management company that oversees more than 10 billion koruna of assets, is setting up another farmland fund. Ondrej Pieran, a money manager at the Prague-based company, predicts an annual return of about 8 percent.