CASE STUDY: Bungalow Smallholding For Sale (Organic Egg Farm)

Request Info

Although this smallholding is no longer for sale, it actually makes a good case study as a guide to help anyone interested in a similar property.

The particulars showcase a chicken egg farm in Abertridwr, Caerphilly CF83 4FG, called Hill View Caerllwyn Farm.

It is a contract egg farming business with all of its output covenanted to the Happy Egg Co.

The facility

It comprises modern poultry shed with 12,000 sq. ft. floor space, plus an array of outbuildings used for the operation of the farm.

The capacity can either house 9,000 birds for standard egg production or 6,000 birds for organic egg production.

The shed was constructed in 2016 and is a multi-tiered accommodation for layer hens.

It comes with solid concrete foundations and all necessary feeding and watering kit.

The land

There are 12.5 acres across 5 fields within the grounds of the farm.

This presents ample pastureland for the 6,000 – 9,000 strong flock to roam, exercise and forage for food.

For upgrade purposes, there is the possibility for mixed livestock farming with potential for grazing rights to accommodate:

• 54 sheep
• 7 cows
• 1 horse

From a poultry perspective, this would only improve the nutritional availability for the chicken – benefiting the quality of egg product.

On a diversification train of thought, this mixed farming set-up would require capital redevelopment to the buildings and equipment (plus permissions etc.)…

…but would offer a more balanced investment yield.

The site benefits from a natural spring and private sewage disposal system.

Residence

There is a 1-bed mobile home (lodge style) on-site which would accommodate a single farm manager.

It is subject to local authority permission, granted on a 3 year period also – tied into the tenure of the commercial supply contract.

Restrictions

There is a 3-year rolling contract with The Happy Egg Co. to bulk buy all eggs produced.

Price?

£360,000 (Guide)

Where’s the value?

It’s clearly a business and not a lifestyle purchase. The property has one accommodation on-site (1-bed lodge) and is only permitted for 3 years at a time subject to local authority permission.

However, it presents a cash flow add on advantage to the right buyer.

With a contract in place, you wouldn’t bear the uncertainty or expense of marketing product to new buyers.

And with predictable supply arrangements for birds and feed – and an experienced (line-in) hired hand, it should produce pretty predictable returns.

But the question is: how much return? And would it be worth ‘shelling out’ the upfront cost?

I’m going to discuss this in a forum topic with sample financial projection too – don’t miss out.

But for now…your thoughts?