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Agricultural REITs will reap 10 per cent yields in 2008
Agricultural Real Estate Investment Trusts (REITs) are expected to reap an annual return of 10 per cent over the next few years.The last three years have seen a steady increase in yields. In 2005 they stood at 3 per cent. This year they are estimated to be 6 to7 per cent, which means that investments in REITs will scoop higher returns than the interest rates on annual bank deposits. Despite the registered rise, however, the profitability of agricultural funds is still lagging behind results from alternative collective investment schemes.
Radoslav Manolov, Managing Director of Advance Terrafund said that yields from funds invested in agriculture depend on land rentals, on the expansion of the company's portfolio and on the performance of its share prices.
These REITs are still in the process of expanding their agricultural land portfolio, which accounts for the slowdown of rental income, Stoyan Toshev, Executive Director of TBI Asset Management, commented.
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