Annual transaction volume of around 2 billion euros “In just two years, Engel & Völkers has successfully established itself in the relatively small market for castles and manor houses with a very high market share. With the brokerage of agricultural and forestry properties, we are now tapping into another strategically important market segment that has seen very positive development over recent years,” said Christoph von Schenck. The annual transaction volume of forestry and agricultural plots in Germany totals approximately 2 billion euros.
Historic estates such as manor houses and castles are in strong demand as investments offer high potential for appreciation in value. Increasing numbers of investors are discovering the promising prospects for future returns associated with the acquisition of heritage properties, due to the diverse range of commercial uses they offer. Such commercial enterprises include usage as company headquarters, a restaurant, hotel, conference or seminar centre, holiday apartments or an event venue. “Demand is especially high in cases where such properties come up for sale with the inclusion of woodland or an agricultural business,” said Christoph von Schenck.
Asset class sought after amongst farmers, investors and private buyers Frequently, buyers are farmers and foresters who are looking to expand their current business operations. Capital investors and family offices are increasingly looking for agricultural and forestry properties to round off their portfolio with profitable agricultural and forestry investments. They also benefit here from the protection against inflation that such investments offer. In addition to investors, ever-greater numbers of private individuals are also realising the potential of this asset class. City dwellers, for example, are fulfilling their dream of owning a small rural recreation area of their own and holiday home for their family by purchasing vineyards. Hunting is also becoming an increasingly relevant factor. “For many private buyers, what begins as a hobby soon develops into a proper business model,” Christoph von Schenck reveals.
For Engel & Völkers, this is a particularly opportune time to enter into this specialist market. “A major generational shift is taking place in Germany amongst farmers at the moment. Large numbers of long-established businesses that are no longer able to compete due to their size, are being put on the market as a result,” said Christoph von Schenck. The increasing need for renewable raw materials and the general shortage of agricultural land resulting from the emergence of industrial estates and new housing developments, along with a growing global population, are making plots used for agricultural and forestry purposes a sought-after investment.
Brokerage beyond local borders offers added value for sellers The buyer group for agricultural and forestry properties is rarely contained to the local region. Christoph von Schenck is registering the strongest demand from interested parties based throughout Germany and western Europe, as well as occasional clients from China. The market for agricultural and forestry properties in Germany is very fragmented and has, up until now, been handled exclusively by local specialist brokers. Engel & Völkers has a key competitive advantage here thanks to its international network and its access to an exclusive clientele. “By applying a systematic approach to brokerage that goes beyond local borders, we are in a position to offer agricultural and forestry properties to interested buyers all over the world,” Christoph von Schenck determines.