Traditional estates with let farms typically made a total return of 10.2% in 2014.
Most of this was accounted for by an average growth in land values of 8.6%, with rental income bringing a 1.4% return, according to the latest analysis by IPD, which produces an annual report on rural property investment returns.
Steep rises in land values have been reflected in similar results for the index over the past few years, with rental income representing a smaller share of total returns.
See also: International farmland market guide
Total return on the same estates in 2013 was 12.3%, with capital growth at 10.8%.
The value of let farms and land on the estates in the index rose to £3.34bn in 2014, this was spread across 2,047 holdings and estates. This compares with a value of less than £1bn in 2001.
More than 76% of the value is in four regions – the South, the South East, South West and the East Midlands.
The highest returns were in the South East, East and the East Midlands, while the highest return by land use was in the arable sector.
Over a 10-year timescale, the highest returns still came from arable investments, but the highest total returns on a regional basis were on estates in the South West.
Demand for this type of investment was strong, said Jason Beedell, head of research at Smiths Gore. The outlook was for continued growth, although at a lower rate, with both traditional and private investors interested in let land.
The strong pound, crisis in the dairy sector and commodity oversupply meant that rental growth would come under pressure, said Andrew Fallows of Carter Jonas.
The estates that make up the IPD database are the Church Commissioners, Crown Estate, Duchy of Cornwall, Guy’s and St Thomas’ Charity, Society of Merchant Venturers, Winchester College, Rochester Bridge Trust, Brighton and Hove City Council, Kings Fund, Oxford University Endowment Fund and Jesus College Oxford.