Real Estate Alliance

REAL ESTATE ALLIANCE SELLS €220m WORTH OF AGRICULTURAL LAND IN 2005

With investors always on the lookout for new products, the latest sector of the property market to experience a significant buying surge is agricultural land.

Real Estate Alliance members have sold €220m worth of agricultural land already this year - but, while other investments, notably in residential and retail property, come with easily calculated returns, there is a significant trend on the agricultural front to buying �hope value� land.

According to Mr. Philip Farrell, Chairman of Real Estate Alliance & Director of Brophy Farrell, Newbridge, "Speculatively, people are investing close to expanding urban centres and hoping that in years to come, rezonings will increase the value of their investments. In the meantime, rental values to farmers can fund loans on the sites." Selling along the development boundaries of different towns can achieve sometimes 4 times the agricultural true value.

Real Estate Alliance members estimate that some 40% of investors fall into this category and they have driven record sales in satellite towns such as Maynooth, where Coonan Real Estate Alliance has sold €9.7m worth of land at the highest average price of €34,000 per acre.

Other big sales were recorded in Mullingar, Co. Westmeath where Murtagh Brothers Real Estate Alliance sold 1500 acres of Agricultural land for approx €20m bringing in the average price per acre at €20,000. In Newbridge the average price per acre was also €20,000, with Brophy Farrell Real Estate Alliance selling 200 acres with a gross turnover of €4m. TE Potterton Real Estate Alliance sold 600 acres in Trim, Co. Meath with a gross turnover of €10.5m, where the average value per acre was €18,000.

In Tullow, Co. Carlow Dawson Real Estate Alliance sold 147 acres with a gross turnover of €2.5m, with the average price per acre being €18,000, while Sothern Real Estate Alliance, Carlow sold 300 acres for €4m averaging at €15,000 per acre.

Going west, in Co. Sligo McCarrick and Sons Real Estate Alliance, sold a total of 1,000 acres with a €5m turnover, the price per acre averaging at €12,000 and in Co. Tipperary the average price per acre was €16,500 where John Lee Real Estate Alliance in Newport sold 261 acres, with a gross value of €4.36m.

The national total was 13,450 acres sold approx €220m, an average €16,400 an acre.

According to Thomas Potterton, Board member of the Alliance & Director of TE Potterton Real Estate Alliance, Trim. "40% of land sold is bought by non-farmers buying land for investment - mainly business people or those from farm backgrounds with other source of income. Although it is a speculative business due to unpredictability of Development Plans, purchasing of this type of land is carried out by the large Builders who can afford to take the chance and afford to wait. 30% of land sold would be bought by Farmers who may have recently sold land for development or who may have received large compensation for land that have they have sold to the Roads Authority. There is also a very strong demand from lifestyle buyers (20%) and small parcels of land can command some very strong prices. A recent case in point would be 5 acres of land which we sold on the main Dunboyne/Summerhill road which attracted serious interest at auction, nearly all from Dublin Buyers & it was knocked down at €485,000 & therefore I would say there was huge hope value attached to this land"

It is anticipated the demand will continue very strong this season and already, along with the under bidders for the farms sold in the Spring, Real Estate Alliance has several serious cash buyers and urgently require farms of all sizes throughout the Country.

For anyone with agricultural land to see, Real Estate Alliance recommends the following simple steps to realise maximum value. Email info@realestatealliance.ie for further information.

Give them a fresh start

Buyers for your land will want to be able to start working it immediately. Having well-prepared and presentable land ensures a quicker sale and will get you a better price for your land. Anything you were meaning to get rid of, well, get rid of it. Clear the ditches, clear up scrub and brushes. If necessary, get in a digger to level ground and clear mounds of earth, overgrown scrub etc.

Make sure the grass is greener

Rich, green grass lets buyers know that they are looking at high quality, productive land. Don�t over-graze it, keep the grassland clean, and top off weeds early. An abundant sward of grass sells the land for you. If you�re selling in the early spring, close off early the previous winter.

Everything in working order

Farmland that provides a good living for its owners should be reflected in the farm itself. Hang gates, tidy up fences and fix water troughs. Get rid of old machinery that will never be used again and power wash the sheds.

The Selling Seasons

Traditionally, the best time for selling is in the spring. Grass growth is lush and the land looks at its most fertile and productive. However, prices are often at their highest in autumn because it is the last chance for purchasers to buy land and they are not willing to wait until the following year when prices could rise again.

Get it in writing

Have your statement of entitlements, area aid maps, soil test results, milk quota documents etc., ready and give them to your auctioneer who can pass them on to interested purchasers.

Keep it clean

Demonstrate that you have employed good agricultural practice over the years. Use enough bedding to keep livestock clean. Make sure the concrete areas around farm buildings are free of manure and slurry. Show drinking systems are managed to avoid overflow and spillage.

Bid for the best price

Agricultural land can be sold by private treaty or auction or, occasionally, by tender. The best option is almost always auction. The largest number of interested parties will be there and other farmers expect good quality land to be sold this way.

Smaller is beautiful

Consider dividing the farm in different lots. Small acreages command the highest prices per acre, but of course, it is not always feasible or possible to divide a farm in that the road frontage may be limited.

Know your Rights

Avoid creating any new Rights of Way where access is concerned, as these can be highly problematic and are liable to be off-putting to prospective buyers.

Better safe than sorry

Take any bulls or dangerous animals off the lands, as generally prospective purchasers will take a look at the property themselves. Neither you nor the selling agent may be aware they are on the farm being sold.

Plan for the future

Check the zoning of the land, particularly where agricultural land is within close proximity to a village or a town. Ask your agent to find out from the county council what the medium to long term plans are for the land. Don�t assume that only farmers may be interested in your land. Developers, for example, may be also be interested.

Water works

Let prospective buyers know if you have mains water supply or natural water supply close to your land. This is one of the major issues for any farmer and a highly attractive selling point.

Build in value

For both farmers and developers, the ability to build on the land increases its worth immensely. It is always worthwhile - well in advance of your putting the land on sale - to make either a planning application or provisional enquiries about the likelihood of being granted planning permission.

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NOTE TO EDITORS

Real Estate Alliance is a strategic marketing alliance comprising some of the country�s best-established auctioneers and estate agents. Our key focus is on locally-owned and established estate agents. With one quarter of the alliance�s firms in business for more than a century, and with an existing IAVI president & five IAVI past presidents among the group�s members, the alliance is characterised by the established strength of its membership. In addition, membership is only open to firms led by members of the Irish Auctioneers & Valuers Institute or the Society of Chartered Surveyors.

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