The Sustainable Farmland trust and the Independent Living real estate investment trust (REIT) have announced their intention to launch an initial public offering (IPO), seeking to raise £200m and £150m respectively.
The Sustainable Farmland trust, managed by International Farming Investment Management (IFC), will provide risk-adjusted income and capital growth through a portfolio of US farmland assets held in the private fund IFC Core Farmland.
It will also invest in the direct farming and agricultural supply chain as well as infrastructure assets, predominantly located in the US.
According to the company, the expanding demand for farmland paired with the constrained supply of new acreage and an ageing farming population have created a buying opportunity.
Additionally, the ongoing industry consolidation is likely to benefit those with factors of scale providing significant investment opportunities.
In the announcement, the company noted that “not only are returns from farmland assets historically negatively correlated to equity market movements, but they also exhibit a historical positive correlation with inflation and are anticipated to be accretive in a high inflationary environment”.
The targeted annual dividend yield is at least 4.5% based on the issue price.
The Independent Living REIT aims to deliver capital growth and inflation-linked income while providing “a fair deal” for society by addressing the shortage of high-quality supported housing, improving outcomes for residents and generating savings for the UK taxpayer.
It will focus on three subsectors of supported housing: specialised supported housing for people with learning difficulties, mental health issues or physical disabilities; extra care, an alternative to care homes with the care typically provided by a specialist third party; and accommodation for people who have an immediate and unexpected housing need, including victims of domestic abuse and asylum seekers.
Rents are funded by the Department for Work and Pensions with annual uncapped inflation-linked uplifts and will generate “material savings for the UK taxpayer” for example by reducing long stay NHS hospital patients.
The company is externally managed, with Atrato Partners as investment adviser, and will target an annual total return of 7% to 10% over the medium term.