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Wed July 15 2020

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House-builder moves into indoor farming

11 Mar A property firm that failed to secure funding for a residential development has decided to turn its attention to farming – or, more specifically, hydroponics.

Valcenteu/Creative Commons
Valcenteu/Creative Commons

AIM-listed developer Trafalgar Property plans to diversify into hydroponic vertical farming and is looking for opportunities. It is in early stage discussions with a potential hydroponics operator who could benefit from Trafalgar’s property expertise.

Hydroponics has existed since the 1950s.  It is a form of controlled environment agriculture, where crops are grown under cover. It is a water-based growth system in which a nutrient solution is pumped around reservoirs in which plant roots grow directly.  In vertical farming, crops are cultivated in vertical stacked levels in buildings, under artificial lights, without soil or natural sunlight.  It requires less land and less water (since the water it is all recycled) than traditional agriculture – and it is all organic as it needs no pesticides or fungicides.

It is battery farming for veg. And Trafalgar sees it as an opportunity.

Trafalgar New Homes is a regional residential property developer focused on Kent, Surrey and Sussex, focusing on small sites of up to a dozen units – a scale that is too small for large developers, but too big for jobbing builders.

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In March 2018 it acquired Trafalgar Retirement to develop assisted living and extra care schemes for older resident.  But difficulties obtaining finance led to the loss of its first development opportunity in that sector. This prompted the board to look around.

It has identified hydroponic food production, which requires significant property investment and expertise, as an area for investment. It is asking shareholders to stump up £2m to fund its new hydroponics venture.

Trafalgar cites a report that predicts the global vertical farming market will grow from $2.2bn in 2018 to $12.8bn by 2026. Other investors in hydroponics include Amazon's Jeff Bezos and Google's Eric Schmidt.  Ocado entered the market in 2019 when it took a majority stake in Europe's largest vertical farm.

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