A GROUP OF City investors with millions to spend is targeting the rural land market in a bid to cash in on its long-term development potential.

First Strata, the public face of the group, has been advertising heavily in the farming press, but relatively little is known about the people behind the firm, which was formed this spring.

But speaking exclusively to FARMERS WEEKLY, operations manager Richard Churchman said he was acting on behalf of five directors who were using their own and external funds to buy land that was of no current interest to developers but might yield big profits in the future.

Only land outside existing planning boundaries with little chance of development under existing legislation would be of interest, said Mr Churchman.

“This is highly speculative.”

Plots from two to 200 acres would be considered, but he didn‘t want to tie up money in houses and buildings unless their value was extremely low.

Mr Churchman would not reveal details of actual purchases, but said the £3.5m budget for May had been spent and “hundreds of acres” bought so far, at up to 10 times the agricultural value.

Sale and leaseback deals where the farmer was paid for the land but carried on farming in return for an annual rent, were ideal, he added.

Mr Churchman said the aim of the investors was to build up a substantial land bank that could then be floated as a public company on the stock market within 5-10 years.

Natalie Price of land agent Strutt & Parker said such deals could make sense but it was important to err on the side of caution and take professional and legal advice before striking a deal.

“You don‘t want to be underselling what you‘ve got.”