AGRICULTURAL LAND FUNDS' INCOME FROM RENTS, LEASES JUMPS 51.3%

 Some companies fail to collect all their receivables

The agricultural land funds that trade on the Bulgarian Stock Exchange increased their income from rents and leases of investment properties 51.3% to BGN 10.5 million in 2009, year on year. That emerged from the annual reports of Agro Finance REIT, Advance Terrafund REIT, Bulland Investments REIT, Elarg Agricultural Land Opportunity Fund REIT and Agricultural Land Opportunity Fund Mel Invest REIT.

Income

All agricultural land funds reported a rise in revenue from rents and leases. Agro Finance REIT was the best performer in terms of growth, as its income jumped nearly three-fold to BGN 1.7 million. We invest in properties designated for cultivation of different crops; that segment was the least affected by the economic crisis, executive director Desislava Yordanova told the Pari daily. In her words, that was the reason why farming land funds featured steady performance last year, despite the downturn.

Revaluations

The income from revaluations of investment properties last year decreased. Bulland Investments REIT's result fell 45% to BGN 410,000. Agro Finance and Advance Terrafund reported no income from revaluations in 2009. There results in 2008 were BGN 4.8 million and BGN 2.2 million respectively. However, Agro Finance said that its audited annual report for 2009 will most probably include revaluations. Only Elarg Agricultural Land Opportunity Fund booked a rise in revaluations by 55% to BGN 3.79 million.

Problems

Some of the funds could not collect all their rents and leases, the reports show. Advance Terrafund's outstanding receivables reached 29.84% of the total amount due, Bulland Investments', 27%. Elarg Agricultural Land Opportunity Fund reported 39.7% unpaid rents and leases but the company expects to boost collection in the first months of 2010.

Results

The total profit of the five special purpose vehicles shrank 52% to BGN 5.5 million. The funds' income decreased 40% to BGN 21.3 million. The reason for the year-on-year slump was actually due to the BGN 15.17 million extraordinary income from sale of properties reported by Elarg Agricultural Land Opportunity Fund in 2008.

Forecast

Farming land prices seen flat in 2010
No big fluctuations are expected in agricultural land prices in 2010, fund managers are unanimous.
According to them, land prices will range between BGN 2,500 and 3,500 per hectare, depending on the land category.