Investors in rural land are better off adopting the Moomin philosophy than following in the footsteps of Trump International, according to the latest research from the Royal Institution of Chartered Surveyors (RICS).

New money in rural areas – Assessing the impacts of investment in rural land assets, published today by RICS, (commissioned by the RICS Research Trust and written by a research team led by Nick Gallent from UCL) 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.

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.

Fiona Mannix Associate Director RICS Land Group advises:

“The clear messaging from this paper is that 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.

“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.”

*Authors’ findings on each highlighted case study:

Donald Trump and Trump International Golf Links Scotland: In 2008, Donald Trump set out to build a championship standard golf resort in Aberdeenshire, on land previously used for farming and hunting, and which included an important and sensitive dune system.  A decade on, the £1billion  golf complex remains incomplete and plans have been drastically scaled back. The initial investment created significant economic capital for the area and included the promise of almost 200 jobs. A decade later the resort facilities have been scaled back and on-site housing development has been increased in an attempt to balance losses.  Pockets of private housing punctuate the site and allegedly underhand attempts by Trump International to buy-out remaining residents have soured local relationships.  Concerns surrounding the impact of the development on the dune system are also unresolved.

James Dyson and Beeswax farming: James Dyson, the entrepreneur behind our ‘cyclone’ technology bag-less vacuum cleaners, invested in Beeswax Farming back in 2012, bringing historic sites across Nocton, Lincolnshire, back under single ownership. Dyson’s purchase was a significant turning point for the local community as it ended plans for an intensive ‘mega dairy’ of 8,000 cows, and alleviated a serious pollution risk. Since purchasing the land, Dyson has promoted traditional arable farming, engages with the local community on proposals for change, and has invested in green energy, bio-diversity preservation and proactive landscape management.  Whilst there is some uncertainty surrounding the motives behind the investment – a love of farming or tax benefits – local and community impacts appear to have been largely positive.

Moominworld Ltd: Moominworld, on Kailo Island near Naantali in south-west Finland, is one of three local business ventures by Moominworld Ltd.  It is a low-technology (no rides!) and low impact theme park which celebrates the ‘Moomin Philosophy’ of personal freedom and closeness to nature.  Around 200,000 visitors come to the park each year, supporting more than 200 seasonal jobs for young people.  Since 1993, Moominworld Ltd have worked closely with the local community and nearby city authority, aiming to maximise the benefits of the park.  The food served in its cafes and restaurants is, as far as possible, sourced locally.  Physical impact on the island has been minimal, with the operators minimising energy and water use and keeping potential sources of pollution in check.  The natural environment is viewed as the park’s principal asset.  It has become an exemplar of low-impact development and environmental responsibility – a place where children and adults from around the world can come to experience a different relationship with nature.