property for sale buenos aires - property investment buenos aires
Interview with Product Manager (April 2009)
- How many phases of land investments have you already sold?
- How fast was the last land investment sold out?
- What are the advantages of SCS Farmland?
- Is there an exit strategy?
- What are the advantages of SCS Farmland?
- Do you have many clients who come back to you to purchase more plots?
1) How many phases of land investments have you already sold?
"Project Greengold was launched in 2007, and since then there have been 4 phases, with different investment options for the investor. Each phased has been very successful and sold out within the expected time frame, if not sooner."
2) How fast was the last land investment sold out?
"The last phase comprised of three options for the investor, Greengold, Capital, Greengold Optimum+ and Greengold Equity. It was launched in August 2008 and we all know what happened with the global economy since then. At first we were concerned that because of the global economic crisis, that people just would put investing on hold, but it was the fastest selling phase so far. With the stock market being very volatile and property prices falling, investors saw Greengold as a stable investment. It is also a very simple investment, we own the land, investors purchase it from us, we farm and manage the land, and then buy it back in 5 or 10 years, depending when the investor wants to exit. While we are farming the land, we pay the investor an annual payment, no different from a rental income, which is a fixed percentage of the amount invested. The land is agricultural land, it grows crops for food, and the need for food is only going to increase, and keep increasing. The population of the plant increases by 75 million people every year, that’s a lot of extra mouths to feed."
3) What are the advantages of SCS Farmland?
"Investors own the land, so they own the asset. In the very unlikely event that we default, then the land is sold and the investors receive the funds from the sale. So there is real security for the investor. In fact there are two other factors that give the investor extra security. Firstly with the latest phase, SCS Farmland, the land has been valued at $6000 per hectare, we are offering it to the investors at $4000 per hectare. Not only that, this parcel of land is 4000 hectares, but only 3000 will be sold to investors, the remaining 1000 is held for the investor in case of a default, so for every 3 hectares they own, then an extra hectare will allocated to them, so they will have 4 hectares sold on their behalf. Another advantage is that, as I mentioned, the annual returns paid to the investor are a fixed percentage of the amount they invested, so it’s very easy to calculate, and the entire investment is fully managed for the investor, so they don’t have to get involved with a huge amount of paperwork. Let’s not forget that SCS Farmland is already productive farmland, not land we are hoping will be productive."
4) Is there an exit strategy?
"Yes, we buy the land back from the investor in 5 or 10 years, depending when the investor has chosen to exit. And the amount we buy back the land for is pre agreed, so in 5 years its price paid plus 15% or in 10 years its price paid plus 40%. Again, very simple and not subject to any fluctuation."
5) Why do you think investing in agricultural land is profitable?
"The world needs food and that need will not go away. Land that produces crops for food valuable. As Mark Twain famously said, “land, there not making any more of it”, which is true. The population is increasing, and the planet has lost land to urbanization and climate change. No matter what your opinion is of the global economy, most people agree that in good times and in bad, everyone needs to eat."
6) Do you have many clients who come back to you to purchase more plots?
"Yes, quite a number, especially in the last 3 months. I think that now the investors have received their first or second annual payments, that they know the investment is working, so they want to invest further. We’ve got investors that have invested in 3 out of the 4 phases. As part of a portfolio of investments SCS Farmland fits in very well, and compared to stocks, shares and property, for some investors it’s the only investment that working for them."