The Global Sustainable Farmland Income Trust PLC (GSFI) is planning to raise around US$300mln (£230mln) through a share placing as it plans to list on the premium segment of the London Stock Exchange in February.
The investment firm has been set up with the aim of acquiring a portfolio of farmland assets in major agricultural markets, the purchase of which will be funded through the proceeds of the placing of 300mln shares at a price of US$1 (80p) each.
GSFI has already earmarked 18 assets for acquisition with another 12 in the pipeline and is targeting total returns of between 7-8% per year over the medium to long term through lease incomes and land appreciation. The dividend yield is targeted at 2.5% per year, growing to 4.25% per year when fully invested.
“Farmland has a historical track record of delivering superior risk-adjusted returns and is underpinned by macro-economic and demographic fundamentals such as a growing population, rising household income and changing diets”, said GSFI chairman David Gray, adding that the company will focus on “acquiring a diverse portfolio of farmland assets which avoids dependency on any one type of crop or geographical location”.
“Our properties will be independently reviewed each year against…globally recognised standards for sustainability covering all areas of farming operations, or other recognised equivalent standard. Adherence to these high standards will ensure that we produce on our farms food and other crops with operations that reflect evolving best practice and concern for the environment”, he added.