Romeo,
I think you missed the point; Redtippey is asking about selling the
land and apparently continuing the business by leasing it back as a
tenant.
It seems that cranberries are a relatively new and growing agro-business in Chile:
http://www.actahort.org/books/446/446_23.htm
Since the land is probably not useful for anything else, the price
would be dependent on the estimated return from this use, based on
several variables: estimates on the future market and price for
cranberry products; what effect further development of the business in
Chile will have - availablity of land for expansion, etc.; and -
most especially if the land is to be immediately leased back long term
- what the terms of the lease would be, since they would determine to
some extent the land's value for the life of the lease. This could be
complicated by offering lease payments in US$ - perhaps the currency
the business earns, and perhaps attractive to a buyer who anticipates
that the Chilean currency will decline in value to the dollar (but
maybe not). In a new industry/branch of agro-business, the view into
the future is often short. In this case, a buyer may consider and
argue that the land is only worth what the discounted value of the
lease payments is worth, not being willing to risk that it will have a
future value, i.e., that the cranberry business will have a future
after that, or maybe - looking around at the possibly immense space
for expansion - consider that at the end of the lease the competion
in the berry industry will have locked up enough land, so that the
market for his will be negligable.
That is not much help, I expect.
The old adage is that a fair price is that which a buyer and seller
agree to when neither is under obligation to buy or sell,
respectively. That is pretty obvious, but if the present landowner
were a foreign entity, and the government were forcing out foreign
owners, as a seller, it would be in a weaker position.
Again not much help, but perhaps a little towards understanding that
without a great deal more information it will be very difficult to
privide a useful answer. |