Investment fund that buy agricultural land in Romania pay lower prices than in countries like Germany and UK and face higher growth potential. German fund ASI Europe GmbH has already bought 4,000 hectares of land in Romania, while Dutch Cibus Farmland Club has also started buying land in the country. British fund Velcourt Group Plc also announced it would start buying land in Romania, according to a report by Bloomberg.

According to Savills Plc, a hectare of land was selling for USD 6,461 in 2012, about a third of the price in Germany – USD 18,500, and a quarter of the price in UK – USD 25,500. The only problem with buying land in Romania is the size of plots that can be bought – on average 3.4 hectares, compared to the EU average of 14.2 hectares. In France, the average farming area is of 53.9 hectares. France is the biggest agricultural producer in the EU.

In order to buy 5,000 hectares of land in Romania, an investor has to negotiate with 500 to 1,000 families, Bloomberg wrote. Romania had 7 million small farmers in 2010, a third of the EU’s. So land price in Romania could also go up if arable land is consolidated into larger plots. Romanian land became more expensive between 2000 and 2012, when prices were up 40%, double compared to the global average. During this period, land prices went up by 5% in France, and by 10% a year in Germany.

editor@romania-insider.com