In a survey of 197 Czech and Slovak high net worth individuals published in June by J&T Bank AS, farmland purchases ranked as the most attractive investment, beating bonds, commodities, and Czech stocks. Last month Cesky Fond Pudy was founded as the first investment company to focus on Czech farmland, and Avant Investicni Spolencnost AS which manages $480 million in assets has established a farmland fund with predicted returns of 8% per year. Czech farmland is some of the cheapest in Europe and the consolidation of smaller plots is making farm management more profitable resulting in farming profits increasing six-fold between 2009 and 2013. Cesky Fond Pudy calculates farmland prices in the Czech Republic to average €6,000 per hectare compared to €7,500 per hectare in Poland, €24,294 in Germany, and €35,000 in Austria. The consolidation of the fragmented landholdings resulting from the dissolution of the Soviet Union is giving funds like Cesky Fond Pudy an advantage when negotiating rental rates and resale values, however there are some factors to watch. Possible political upheaval in the region, or negative changes to the EU’s agricultural policies that would cut into farming profits and slow the demand for land are possible but are considered to be unlikely.
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