MAGAZINE SPECIAL REPORT: City dwellers go rural for authentic experience

Urban dwellers are heading out to the countryside for 'authentic' weekend experiences and 'competitive socialising', while rural land owners cash in.

You probably don’t need your friendly, neighbourhood hipster to remind you that all things artisan are now cool. In the retail revolution, no food hall is complete without organic produce and farm-to-table traceability. Craft traditions – and the hunt for authenticity – have become big business.

And while urban farmers’ markets and pop-up festivals on brownfield sites have brought a dose of bucolic charm to inner-city areas, the lure of the countryside has never been stronger. According to Emily Norton of Savills, the time is right for rural landowners to capitalise on the trend, drawing city-dwellers to seek new experiences out of town.

‘Land owners across Europe have the ability to offer access to some of the most fantastic, unique landscapes around,’ says Norton, ‘so there’s a real opportunity in the agricultural industry to leverage an appetite for the outdoors. We’ve moved on from simple agritourism – holiday homes and country lunches – to offering services around trips and weekends away. Whether that’s cookery classes, farm tours, or simply just creating picnic meadows for an easy day in the country, the latest offerings are more exclusive, and more tailored to individual needs.’

A new report on the UK from Savills shows how far rural landowners have now come in terms of what the advisor dubs ‘experiential diversification’. Of the countryside estates surveyed, 30% were making extra money from holiday lets, 28% from open houses and gardens, and 24% by creating wedding venues. On top of that, 16% were generating revenue from outdoor events, and 12% from farm shops.

‘In the UK, there’s been a six-fold increase in the number of music festivals,’ Norton adds.’ Last year there were around 1,000 music festivals in the UK. You essentially need a field, and somewhere to camp, and somebody playing some music – provided local licensing restrictions are met. So, there is clearly a burgeoning desire for people to get away for the weekend. Street-food can tap into this, as can local breweries, local music and the arts scene. It becomes a really beneficial for many aspects of the rural economy, not just land owners,’ she notes.

Driving diversification
At the heart of the appetite for ‘experiences’ lies a generational switch, Norton says. ‘Of the general demographic trends that are happening amongst younger people, Millennials feel like they have enough stuff - so what they want are social media friendly opportunities for “competitive socialising”,’ she says. ‘Things that they can show off about and photograph well.’

And the need for rural estates to diversify their income has never been greater, due to another imminent cultural shift – Brexit.  At the moment, land owners in the UK receive a direct payment under the EU’s Common Agricultural Policy, based on the amount of land that farmers own, rather than incentivising certain practices. And while similar payments are set to continue up until 2027 – nearly a decade after the country exits the EU – current environment and food secretary Michael Gove has already sketched out a replacement system which will link farming subsidies to environmental goals.

‘In the future, the UK will move to a system of so-called public money for public goods,’ says Norton. ‘Rather than money being conditional on agricultural activities, it will be linked to environmental or social activity. And there are all sorts of interesting ideas around this, tying funds to health budgets to promote a healthier population. This kind of policy will promote the mental and physical wellbeing of spending time in the countryside as a kind of “green gym”. Specific examples include walking groups and boot camps, to name but a few.’

And a free-market future may create even more opportunities. ‘The most productive rural estates are already deriving the vast majority of their income from non-agricultural sources anyway,’ Norton says. ‘For our top performing clients, less than 30% of their overall income is from agriculture. These new trends are really about diversifying income away from volatile agricultural markets as the UK possibly becomes a freer trading environment. New activities that ideally tie into an existing farm enterprise can really just help eliminate some of the troughs from the agricultural supply chain.’

An artisan approach
UK rural property specialists BCM recently sent one of their associate partners, Tom Bishop, to New Zealand to assess what rural England might look like after the EU exit. New Zealand is an apt case study, because in 1973 when the UK joined the EC, much of New Zealand’s export opportunities to Britain dried up overnight. The New Zealand government promptly abandoned its subsidy system, leaving farmers to cope on their own. How did they manage? According to Bishop, ‘a system without subsidy focuses the mind on the real issue of farming – producing food.’

But he found many successful, small ‘one man and his dog’ enterprises which were making as much money in terms of income per acre as the big agribusinesses due to sheer ingenuity. ‘If there’s a hard Brexit, or one that doesn’t deliver tariff-free machinery to our docksides, the large-scale imports on which we rely may no longer be affordable. Frugality may be enforced through necessity,’ Bishop says.

Perhaps it’s appropriate, then, that the new vogue for all things artisan, the generational shift towards craft and hand-made, rather than mass-produced, is wooing a fresh wave of farmers from the Millennial tribe.  ‘There’s a much more diverse approach to bringing skills into the industry today, which will inevitably attract more people back into agriculture,’ says Norton. ‘One of the most interesting things I think will happen is the emergence of more individual ways to manage complexity within business. In terms of creating experiential opportunities, the clever thing is to partner with somebody who can add the right skills. Events businesses, local park run companies and local health services can all potentially contribute external expertise to rural industries in the future.’

Despite an overall global trend of more people moving to urban areas, studies suggest that many Millennials and members of the younger generations are primed to abandon the rat race and seek their fortunes in rural areas. Climate change remains a challenge to farmers, but as demographic spikes place pressure on agriculture to produce more food, while the world’s wealthiest continue to demand quality, niche products - from champagne to saffron - rural terrain will seek to serve both needs by harnessing innovation.

BNP Paribas RE’s latest report on rural land highlights increasing proptech use in the wine-making sector, where drones are being used in France to monitor the number of unproductive grapevines on plots of land. By using sensors installed on drones, the temperature and hygrometry in wine cellars can also be measured, with subsequent adjustments made thanks to digital networks. Meanwhile, to face labour shortages at vineyards, prototype robots are being developed for the wine industry to assist with monitoring and weeding land.

BNP Paribas also finds that forestry, on the back of economic recovery - including across the construction sector - is a growth area. Timber prices are rising, especially oak, further stimulating demand.

Unsurprisingly, institutional investor interest has been rapidly catching up. AXA Investment Management – Real Assets (AXA IMRA) is one of the few active players in forestry investment across Europe, managing around 5,500 hectares of forest in Finland, and around 15,000 hectares in France on behalf of clients. Modern forestry has come a long way, today focusing on wood quality and the infrastructure to facilitate industrial harvesting, while using big data to analyse forest estates and identify investment and divestment opportunities. According to AXA IMRA, as a carbon-neutral asset class which is largely immune to economic cycles, forestry is a sustainable investment in several senses. The asset manager says all its managed forests are PEFC (Programme for the Endorsement of Forest Certification) or FS (Forest Stewardship Council) certified, an ethical benchmark for the responsible management of forest land.


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