The Crown Estate has partnered with Velcourt, Europe’s leading farm business manager, to create a new venture to manage the 4,500 acre Ellington Estate in Northumberland.
A new Farm Business Tenancy (FBT) has been developed that will see rent divided between a base and a variable rent linked to the production and success of the holding – unlike standard FBTs in which the variable element is based on prices in the market.
The move is the first of its kind for The Crown Estate, which, as one of the UK’s largest rural landowners, manages a 360,000 acre portfolio of forest, farm and common land, with agricultural estates mainly let to tenant farmers.
The new style of FBT has been designed specifically to facilitate partnership working and investment by both the landowner and the farm manager to maximise productivity and returns.
Formerly owned by Rio Tinto, The Ellington Estate – which was on the market for £20m before it was bought by the Crown Estate in February 2014 – includes agricultural land, farm buildings, 19 homes and an operational 13 turbine wind farm leased to Scottish Power Renewables.
In addition to the Velcourt agreement, The Crown Estate has also let a 92 ha livestock enterprise to North East farming business Annett & Sons on a seven year FBT agreement.
As with all current forms of FBT issued by the business, this includes a focus on the long-term sustainability of the farm - for example, through provisions around sustainable soil management.
To further enhance the quality of the estate’s arable land holding, The Crown Estate is likewise progressing a £400,000 investment designed to improve drainage systems, with a primary focus on upgrading the farm’s fixed equipment.
Ken Jones, director of the Rural & Coastal Portfolio for The Crown Estate said: “The agreements with Velcourt and Annett & Sons and our on-going investment at Ellington encapsulate the progressive approach to land management which we believe is essential to maximise the productivity and long-term sustainability of our portfolio.
“The new partnership structure we’ve developed with Velcourt is particularly exciting as being directly involved in the management of the land will provide high quality data which will be invaluable in developing innovative management solutions across our portfolio.”
Established in 1967, Velcourt , which is retained by land owners, tenants, farmers and institutional investors, works with farms throughout Europe and manages around 50,400has in the UK and funds rural businesses.
Velcourt chief executive James Townshend, said: “Joining forces with one of the UK’s largest and most experienced agricultural landowners on its newest acquisition is a fantastic opportunity.
“We are looking forward to working with The Crown Estate’s team and contributing our experience and skills to create a high yielding, high quality UK farming venture.”