Investors in UK rural land are better off adopting the Moomin philosophy than following in the footsteps of Trump International, according to latest research.
The research, published today (31 May) by Royal Institution of Chartered Surveyors (RICS) analyses new investment patterns in rural areas, drawing on case studies from across Europe.
As land continues to be an attractive asset, the research compares investment cases that include Moominworld in Finland, Dyson’s investments in UK farmland, and Trump International’s Menie Estate golf course in Scotland.
It looks at the most beneficial investment patterns, not just those seeking good returns on capital, but also for local communities.
By examining the impact of investments and associated land-use changes, the research found that more can be done by national governments and international bodies to reduce the risk of local conflict and unsustainable development resulting from the pursuit of short term gain (‘quick economic wins’) through the setting of clear environmental, social and governance (ESG) standards.
The clear messaging from the report is that Governments and international bodies globally should assess rural investments utilising an environmental, social and governance (ESG) framework prior to their initiation, possibly by the development of a global framework.
Greater consideration of such standards prior to funding and planning permission would have prevented the worst cases of local conflict and investment decline observed in the case studies.
While investing in rural land has many complexities, ensuring equal weight is given to ESG and monetary considerations tends to reduce risk, increase returns, and also maximises the positive impacts of new economic activity.
Trump, Moomins and Dyson
Ten case studies from across Europe were assessed to determine the impact of different models of rural investment.
Many examples of good local relationships delivering positive outcomes were found, but others were characterised by growing distrust and suspicion.
In some cases, investment activities were being imposed on communities without consideration of, or consultation on, the local impacts.
The underlying values of investors, and the way in which assets are managed were shown to be a key determinant of positive outcomes.
Amongst the case studies with a range of broadly positive local impacts were James Dyson’s Beeswax Farming investment, which delivered a consolidation of fragmented land holdings and a range of physical changes.
Time was invested in building good relations with local people, winning support for numerous projects.
In Finland, the Moominworld investors built similarly good relations, delivering an exemplar of low-impact, sustainable development that has also been a significant commercial success.
The processes and practices of community engagement around Trump International’s investment in Aberdeenshire have been less successful, resulting in an investment mired in controversy and poor, sometimes combative, relationships with nearby communities.
Moreover, commercial priorities have too regularly been allowed to conflict with important environmental values, resulting in a project of doubtful sustainability.
'Financial sense'
Fiona Mannix, Associate Director at RICS said the research shows governments and international bodies globally should assess rural investments utilising an ESG framework prior to their initiation.
“There is growing market recognition that assessing these factors makes financial sense and will assist in maximising the investment benefits not only to the investor but also importantly to the local community,” Ms Mannix said.
“The 2018 report provides evidence that direct and active investment over the long term that involves the local community will provide greater financial, environmental and social benefits for all involved.”
Nick Gallent, Lead Author and Head of the Bartlett School of Planning, University College London commented: “While the case studies are all quite different, and direct comparison is difficult, evidence of clear benefits emerged from working closely and openly with communities to deliver commercial goals. Equally, there is added value to be gained from sensitive engagement with landscape and environmental assets.”
