ASR Real Assets has launched a ground-lease structure that waives rent for up to two and a half years to help Dutch farmers transition to organic or regenerative agriculture.
The manager is offering Transition Ground Lease, through the ASR Dutch Farmland Fund, to allow agricultural tenants to spread a 50% discount across the first five years of their contract to free up working capital for sustainability investments.
The scheme waives ground rent for up to two and a half years across the first five years of the contract, making the manager what it claims is the first landowner globally to do so.
Transition Ground Lease provides financial flexibility during the period in which agricultural entrepreneurs need to make additional investments to improve sustainability and transition their operations, ASR said.
Under the terms of the lease, farmers must agree a transition plan outlining their business strategy, financial targets and sustainability objectives. Participation in the Open Soil Index and annual progress reporting are mandatory.
Dick van den Oever, fund director of the ASR Dutch Farmland Fund, said: ‘We are seeing growing interest among agricultural entrepreneurs in switching to sustainable business models. A lack of financial headroom can be a reason to postpone this transition.
“Transition Ground Lease can make a real difference by providing both flexibility and confidence. It is very encouraging to see our investors support our sustainability programme with an investment perspective of more than 20 years and share our ambition to play an active role in making Dutch agriculture more sustainable.”
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