Nursery sells farm and leases it to grow trees

1 May 1998

Nursery sells farm and leases it to grow trees

SALE and lease back has made a comeback in Shropshire.

The once-popular deal allowed vendor Maelor Nurseries to sell the 88ha (218-acre) Fields Farm, Bronington, where it grows 70m tree transplants, at current high land prices. But Maelor retains occupation for the next 25 years under a farm business tenancy.

The buyer purchases income for that period, then takes vacant possession at the end of it, explains Roger Plowden of Smith-Woolleys, the chartered surveyor acting for the vendor.

"A particularly unusual aspect of the sale is that rents will be reviewed according to the rate of increase recorded in the ministrys annual survey of tenanted land," says Mr Plowden. "The theory is that rents will continue to increase, but not necessarily as quickly as inflation." The investment sold on a gross yield of 5.54%.

Such FBT-geared deals could prove useful to farmers looking to retire in the next few years, he adds. "It would allow them to realise capital and continue farming until an agreed date."