Ruben Figueroa

Madrid, Mar 4 (.).- While the traditional farmer ages and the land is increasingly fragmented, the Spanish countryside is receiving large capital investments that see in the sector a safe investment with high profitability, above 10% , factors that have also aroused the interest of the socimis.

The investment funds buy large plots or a set of small contiguous farms -which are becoming fragmented with each inheritance that is distributed among young people who do not want to work the fields-, and seek to increase yields, with intensive and highly mechanized crops.

But the entry of venture capital in recent years has occurred above all through mergers and acquisitions of companies in the agri-food sector.

In Spain the phenomenon is incipient, but worldwide, in the last 17 years, the number of investments in agri-food has multiplied by 20, giving rise to almost 900 investment funds with assets under management of around 140,000 million dollars ( almost 132,000 million euros), according to an analysis carried out by Valoral Advisors for the Cocampo property buying and selling company.

A PROFITABILITY ABOVE 10%

“Agriculture has ceased to be a traditional sector, it has matured and has reached that critical point for institutional investors (investment funds) to enter the field,” the associate director of the Agribusiness sector for Spain at the consulting firm explained to EFE. CBRE Real Estate, Héctor Rodríguez.

These funds incorporate technology and make crops a safe value to obtain returns “above 10%” and are based on a scale production model that reduces costs, this expert has abounded.

They are attracted by the fact that it is a “stable” and “simple” asset, necessary to cover a basic need such as food, and they consider agriculture as “a refuge sector” that has proven resistant to economic cycles inflationary periods, Rodríguez pointed out.

SOME LARGE OPERATIONS

Although there have been land transactions, the ownership structure remains almost unchanged and 93.8% of farm owners are individuals while the remaining 6.2% are legal entities, according to the latest official data.

This is so because the main operations in the Spanish market have been acquisitions of companies in the agri-food sector, “sale & leaseback” (purchase with a subsequent lease of between 20 and 25 years) and the introduction of a new capitalist partner, according to records. in a CBRE report.

In recent years there have been operations such as the purchase of Pastas Gallo and the juice manufacturer Go Go Fruselva by ProaA Capital, as well as the entry of this fund into the table grape company Moyca Grapes.

In addition, among other moves, Abac Capital has acquired the fruit and vegetable company Agroponiente, the investor Atitlan has teamed up with the Portuguese Sovena to acquire Frutas Romu, CVC has bought the Panzani pasta business, and the real estate manager Azora has entered into the ISFA almond company.

SOCIMIS WAIT FOR THEIR TURN

The sector has also aroused the interest of listed public limited companies in the real estate market (socimis), created 10 years ago to attract foreign capital and private savings towards real estate investments, but at the moment they cannot operate with rustic properties.

These companies benefit from a zero tax rate and are required to distribute 80% of their profits in the form of dividends.

In 2022, the stock market consultancy Armanext presented a project to the Ministry of Finance that exposed the advisability of reforming the socimis law so that they can also invest in agricultural, livestock and forestry land, as is already the case in other countries, but the Department has not yet ruled.

For Fernández, the authorization of the socimis in the field would facilitate the entry of small investors and not only large investment funds, and would favor small landowners who do not work them and who could lease them to these companies, which would invest in them. and they would distribute ample dividends.

The founder of Cocampo, Regino Coca, has been in favor of the entry of socimis into the agricultural business but has told EFE that it would be necessary to “ensure from a legislative point of view” that “they favor leasing by new farmers and farmers”, instead of being solely focused on investors and their profits.

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