With prices of commercial and residential property falling, investors are increasingly turning to a more traditional asset: farmland. Long seen as a declining industry, farming has received a fillip in the last few months as global demand for food has increased. As a result, the cost of agricultural holdings across the European Union has risen to record levels. In response several funds have recently been set up to buy farmland. In particular the UK, where prices have risen 40 per cent over the last year, has been active. Braemar, a fund manager, is one example. The Manchester-based group has been swamped with offers since it launched a fund this year. "We closed the fund in two weeks but we are going to reopen it," said Marc Duschenes, chief executive. He would not reveal how much had been raised from wealthy individuals but said the fund would buy its first 200 acres soon. The land will be run by contract farmers so there could be revenue as well as capital gains. While Braemar faced stiff opposition from farmers looking to expand, he said many were also looking to cash out after 20 years of flat land prices. Braemar has also opened an offshore open-ended investment fund in Guernsey. "We have everyone from pensioners looking to avoid inheritance tax to stockbrokers looking for a secure investment," said Mr Duschenes. Andrew Shirley, head of rural research at Knight Frank, a property company that is establishing its own agricultural investment fund, said land prices were rising across Europe. "It is not only UK land values that are increasing sharply, the global commodities boom means investment funds are looking further afield for cheap land and this is helping to drive prices up, particularly in eastern Europe and the former Soviet bloc where there are vast tracts of underutilised and potentially very productive land," he said. In Lithuania a hectare of agricultural land cost