In 2022, Regino Coca took advantage of the family tradition in agricultural management to create Cocampo, the leading portal in Spain for the purchase, sale and rental of farms. Coca assures that “investing in rural land is not a passing fad, but a trend with solid fundamentals and which is here to stay”.
What added value does Cocampo bring to the rustic real estate sector?
Our ability to make a traditionally fragmented and opaque market accessible and transparent. With a simple platform and with over 100,000 potential buyers per month, we facilitate generational change in the countryside and help farmers and ranchers find new opportunities. In addition, we promote the professionalization and digitalization of the sector, by offering valuation tools and updated data on prices and trends in the rural market. Download the elEconomista Agro magazine for free
Investment in rural land has soared in recent years. For what ?
Basically due to three key factors. First, because of the lack of generational change. Currently, 41% of farm owners are over the age of 65 and it is estimated that 50% of rural land will change hands within this decade. This creates a constant flow of investment opportunities as many heirs prefer to sell, facilitating the transfer of land to new market players. On the other hand, this lack of labor has accelerated the mechanization and digitalization of tasks in the field, thus increasing profitability for investors with the capacity to manage large areas. Third, the pandemic and the search for more sustainable lifestyles have sparked growing interest in rural land, attracting a new class of investors and individual buyers. Added to this context is the demand for rural land for renewable energy projects, solar, wind and recently, with great force, biogas, and the search for profitable real estate assets by income investors as an alternative to assets urban areas, affected by increasing pressure. regulation and greater competition.
And is it a passing fad or is it here to stay? Why invest in rustic land?
Investing in rustic land is not a passing fad, but a trend with solid fundamentals that is here to stay. This investment is attractive for several reasons. Unlike urban assets, rural land is less susceptible to market fluctuations and offers stable returns over time, with the potential for long-term appreciation. Additionally, the aging of property I mentioned earlier and the need for succession are generating a significant volume of transfers, creating unique opportunities for investors. Added to this is the fact that the transition to renewable energy is driving demand for rural land for solar, wind and biogas projects, sectors that will continue to grow.
“We facilitate generational change and help farmers and ranchers find new opportunities”
Spain is an agrarian power. Do your customers also come from outside our country?
Around 20% of connections to Cocampo come from IPs outside of Spain, reflecting growing international interest in the Spanish market. This foreign buyer profile generally brings significant added value, as they have greater liquidity and greater determination to close transactions. However, we have observed that international investors are sensitive to sensationalist messages from certain media. For example, the recent period of high olive prices has sparked great interest in olive groves, while other topics, such as drought and the future of agriculture in Spain, have sparked thematic doubts, without nuance. scientific arguments.
For which crops is land more in demand and in which regions of Spain?
Currently, demand for land in Spain is focused on crops that allow mechanization and economies of scale. The most demanded areas are Extremadura and Aragon, due to their lower prices and the availability of quality land with access to water. Castile-La Mancha stands out above all for the cultivation of almonds and pistachios, while in Andalusia investments have slowed down in the last two years due to drought. Murcia and the Valencian Community maintain a profile of agricultural buyers who are always attentive to new opportunities. In regions like Lérida, the Basque Country, Cantabria, Asturias and Galicia, demand is so strong that medium and large agricultural and livestock areas barely reach the market. On the other hand, interest in recreational farms continues to grow, outpacing that of farmers and ranchers in volume.
And what is the buyer’s profile?
It’s varied. On the one hand, there are agricultural professionals who are looking for land to expand their farms. On the other hand, there are investors, notably funds and family offices, interested in real and sustainable assets. These buyers see attractive investment opportunities in the agribusiness sector, in land with potential for profitable crops or in farms with specific characteristics for sustainability projects, such as renewable energy production or CO2 capture. Finally, an important profile is that of recreational property buyers, interested in properties for personal enjoyment and quality of life.
Is this growing interest putting upward pressure on land prices?
Land prices always tend to increase, as seen in advanced economies like the United States or Australia. Hence our motto in Cocampo: “Buy land, it is no longer manufactured”, because scarcity leads to revaluation. In Spain, we are witnessing the greatest revaluation of irrigated land close to large cities. This revaluation is also correlated with inflation, and it is important to remember the recent phase of soaring inflation that we have experienced. Although some see rising prices as something negative, my view is different: what matters is the profitability of the land and the availability of financing and investment alternatives. At Cocampo we want to provide transparency and access to all market opportunities, because banks and private investors will always want to finance good agricultural and livestock businesses, and the exiting farmer must find a fair return on the value of land. In other words, very cheap and very unprofitable land doesn’t help anyone. The real challenge at present is that data shows historically low levels of long-term mortgage financing for rural properties, which is the real barrier to access to land, not its revaluation.
Some agricultural organizations denounce the fact that investment funds displace professionals. Are they compatible?
The presence of investment funds in the agricultural sector is compatible and, in many cases, beneficial. Its capacity to provide capital promotes modernization, investment and experimentation with new agricultural, technological and sustainable practices, generating a positive effect for the entire sector. We are likely seeing the beginning of a future with three clearly defined types of farms: large, corporate-run farms that, with the support of investors and savers, seek to provide affordable food to a growing population; iconic farms in the hands of farmers and ranchers, aiming to produce sustainable, high-quality products that meet the demands of consumers in advanced economies; and finally, recreational and self-sufficiency farms, a growing trend. In this subject, an important part is omitted and that is the will of the seller. If the farmer who owns it wants to sell, we must help him. This question of the buyer’s profile will therefore not be limiting. If we want a diversified agricultural model with individual and family profiles, we must promote tax incentives for individuals who work the land, increase financing and strengthen cooperatives. This would change the rural economy.
