Calum Innes, says selling a wind turbine could potentially create substantial gains for use in positive, longer-term investments such as agricultural or forestry land, or perhaps diversifying into other property sectors.
There is strong demand for good developments. Galbraith recently sold Ferneylea Windfarm, comprising two 750kW turbines, for a market leading price. Duncan White of Renewable Power Exchange, the seller, confirmed that the interest generated in the subjects from a targeted marketing campaign was unprecedented and the price achieved was significantly ahead of any sum offered off-market and doubtless represented a market leading value.
Many farmers may be considering available options in respect of their wind turbine developments. The feed-in tariff underpins a generous return on capital and most operators with a turbine operating under a FiT will have achieved good returns in the low-interest rate climate prevailing. However, this environment may change following this month's increase in the base rate from 0.25 to 0.5%.
FiT has been severely restricted for new schemes, fuelling interest from investors seeking to aggregate existing assets. Calum Innes said:
Many farmers and land owners view wind turbines as an investment in property rather than a crop or item of plant. However, it is a depreciating asset and it is important to examine that investment and balance the long-term benefits of selling and holding.
The preferred option would be to sell the turbine and its underlying income stream whilst retaining the land subject to a lease. Rather than waiting for the turbine to become a liability, it may be wiser to sell, while retaining ownership of the land.
Galbraith has unparalleled experience in the energy sector. For example the firm's involvement in Ferneylea started with valuing the undeveloped site and subsequently providing consultancy to support an equity investor's due diligence process. This involvement has now concluded with the preparation of the subjects for sale, subsequent marketing and dealing with interested parties to progressing to a successful transaction.