Igor Mazepa
Our online platform KupiPai will ensure and support fast and reliable land deals
12.08.2021
Igor Mazepa, CEO and Founder of Concorde Capital investment company, about advantages of investing in land over investing in residential real estate or bank deposits
Igor Mazepa , CEO and Owner of Concorde Capital investment company, spoke about advantages of investing in land over investing in residential real estate or bank deposits. He shared his views at a presentation of the KupiPai online platform developed by his company.
Concorde Capital has launched the KupiPai online platform (https://kupipai.com.ua) that brings together farmland owners, investors, and agricultural holdings. The platform offers turnkey legal and consulting services to support the farmland sale transactions.
“According to our estimates, black soil will cost about US$2,000/ha on average at the first stage of the land market launch, while an agricultural holding will pay rent of US$150-200 a year under a tenancy agreement. Therefore, the guaranteed rental income will stand at 7-10% per annum. At the same time, the annual growth in land prices is expected at 15-20%, similar to the price trends in most European countries after the land market launch. As big capital cannot enter the market over the next two years, this will maximise returns for trailblazing investors. Our platform will power a fast and reliable process of buying and selling for both parties,” said Concorde Capital CEO Igor Mazepa at the presentation.
According to Igor Mazepa, investing in land is a more profitable alternative to investing in residential real estate or to bank deposits. Since investors in residential real estate gain 5-7% of rental income and "a thorn in their side" because they have to control proper condition of the asset all the time. Leasing land to agricultural holdings, investors gain 7-10% per annum, and the agricultural holdings will be responsible for maintaining the excellent condition of the land, because it is their main production asset. The rate of long-term deposits is 6-8% for UAH-denominated deposits and 1-3% for USD-denominated deposits, with the bank and the State acting as the guarantor of return of money up to the deposit amount, while investments in land are secured by a firm collateral in the form of land itself.
KupiPai will help potential investors, tenants, and land sellers find one another and complete turnkey transactions. The platform offers:
- Selection of plots for investing. Independently or supported by KupiPai consultants, investors use an interactive map to select a list of agricultural plots for purchase.
- Conclusion of a service agreement; issuance of a KupiPai power of attorney. When concluding an agreement, an investor advances a commission fee of 5% of the total price of the land plots for transaction support services and compensates for additional costs of the transaction notarisation.
- Wire transfers to land owners. Settlements for the purchase and sale of land plots are exclusively between an individual investor and a landowner without the involvement of KupiPai.
- Receipt of land documents and lease agreements made with an agricultural holding by mail or in person.
- Increase in return on investments. The payback period for investments in land is 10-15 years if agricultural holdings buy land plots themselves. It is more reasonable to channel such investments into expansion of the land bank by purchasing corporate rights of neighbouring farms, thus securing a payback period of 4-6 years.
- Neutralization of hostile buyout risks. Unlike local competitors, investors at KupiPai are portfolio investors seeking long-term passive income.
- Increase in average land lease term. KupiPai secures renewal of long-term lease agreements between investors and agricultural holdings, thus increasing the average farmland lease term.
- Decrease in settlements in kind and social expenses. Settlements with investors will be made only in cash.
- Higher liquidity of land plots. When an investor sells a land plot independently, the sale transaction continues for up to three months and may be blocked by the current tenant. With a mechanism of transfer of the pre-emptive right from an agricultural holding that partnered with KupiPai to an investor on the platform, the sale transaction can be completed within 1-2 weeks.
- Fair value of land. Landowners are not always paid the market price for their land, as a pool of potential buyers of land plots is usually limited to the current tenant and a few local farmers. Portfolio investors attracted by KupiPai are ready to pay the fair price, which is 10-14 times higher than the current rental rate.
- Legal support. Having partnered with leading law firms specialising in agricultural law, KupiPai guarantees proper legal support for the sales and purchases of land plots and settlements of the parties.