The rent brings 5-7% of the value of the land plot and will grow in the future – the expert
The Ukrainian land market has growth potential, and several factors make investments in it unique compared to other sectors. — Andrey Usenko, the founder of “Tvoye kolo” and “Myastoriya” companies, told about this at the “Invest Talk Summit” investment conference.
0
According to the expert, land is a unique asset for three main reasons.
First, there is no more land. “Taking into account agro-climatic changes, the land on which it is possible to engage in agriculture and earn money will become smaller,” says Usenko.
Secondly, land is an asset that morally and physically does not become obsolete. At the same time, according to him, the land in Ukraine is the best in Europe in terms of quality and fertility.
Thirdly, land is the main means of production in agricultural companies. “The Ukrainian agricultural sector is a huge part of the national economy and it is deeply integrated into global food security,” Usenko noted.
Two sources of income
As the expert explains, for an investor there are 2 sources of income in the land market: rent and cost growth.
“You can be guided by the fact that the rent will be 5-7% of the value of the land. At the same time, it grew all the previous years, and I am confident that it will continue to do so in the future,” says Usenko.
Also, he notes, there are two factors contributing to the increase in the value of plots. “The first is economic. That is, the dependence of land value growth on the added value created on this hectare. Now all agrarians have realized that it is not enough to stay within the framework of the “sow-harvest-sell” strategy. It is necessary to consider processing options in order to create added value per hectare. This will be connected with the investment of agricultural companies and farmers in the land,” the expert notes.
The second factor in the growth of land prices is demand. “We are at the beginning of the land market and there will be no such price as it is now. It will undoubtedly grow. The end of the war, the entry into the market of legal entities, and in the future the entry into the European Union and access to this market by foreigners will be the drivers for price growth,” Usenko predicts.
About “Invest Talk Summit”
On May 27, the Invest Talk Summit investment conference was held, organized by the website of the Ministry of Finance with the support of the Academy of the Ministry of Finance and Finance.ua.
The conference was attended by investors, owners of leading Ukrainian companies, managers and experts in the field of finance. They discussed the current situation in the economy and forecasts of its further development, as well as gave their recommendations on investments in the real estate market, cryptocurrency, balancing the investment portfolio, etc.
Access to the full speech of Andrey Usenko and other participants of the “Invest Talk Summit” can be purchased here.
Source: Ministry of Finance
Views: 23
