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AP Pension open to investing in Danish farms if land prices fall

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DENMARK - AP Pension says it is ready to invest in Danish agricultural land, but only once prices have fallen by around 30%.

The DKK50bn (€6.7bn) customer-owned pension provider said there was a need for new thinking regarding the financially squeezed Danish farming sector - pension companies could be future owners of the country’s agricultural land if conditions were right, it said.

Managing director Søren Dal Thomsen said: “I can easily see AP Pension playing a role as an investor in Danish agriculture. But there is one crucial condition - prices must be right, and they still aren’t.”

AP Pension is not interested in getting involved in running farming businesses, but is ready to invest in Danish farming land, he said.

Citing the guidelines on farming land prices published recently by the Danish financial regulator (Finanstilsynet), the pension fund said the land was currently priced at DKK120,000-160,000 per hectare, depending on the region.

“AP Pension is prepared to strike if prices come down to around DKK100,000 per hectare,” Dal Thomsen said. “This would make the investment economical enough in the long term to match the yield AP Pension has put in prospect for its customers.”

He added: “We need to think of new models to solve the problems in farming, which is still a very big source of income for the Danish economy, and which represents many jobs.”

If the price were attractive, other investors might get involved in supporting agricultural business, he said.

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