Cashed-up domestic families and global investors are duking it out for Aussie farmland, with billions of dollars changing hands in the past year.
Property Council of Australia CEO Mike Zorbas says there is “no doubt” the Labor government’s investment in Build-To-Rent will unlock up to 150,000 new homes. “This is so welcome because, at the same time, we’re trying to fill big gaps in our economy with migrants from overseas,” he told Sky News Business Editor Ross Greenwood. “The big story of this budget, from my perspective, is that there’s 1.5 million new people in the market to rent or to buy property over the next five years to 2027.”
AgJournal’s annual investigation into Who Owns Australia’s Farms – now in its seventh year – shows a continuing trend of the larger, more established players increasing their investments amid a growing appetite for scale and efficiency.
Billions of dollars’ worth of Australian farmland has changed hands in the past year flying in the face of short-term concerns about rising interest rates, record input costs, weakening commodity prices and a less favourable seasonal outlook.
The investigation revealed that most of the biggest players in the Australian farmland space increased the size of their portfolios in the past year while several newcomers also flexed their investment muscles.
Australia’s biggest landholders – Viv Oldfield and Donny Costello of Crown Point Pastoral Company – lifted their holdings by almost one million hectares while the three biggest investors by value, Canada’s PSP Investments, the local and overseas-backed Macquarie Agriculture funds and the New York-based TIAA-CREF all made strategic additions to their portfolios now worth a whopping $11 billion-plus combined.
This article contains features which are only available in the web versionTake me there
ANZ agribusiness boss Mark Bennett says there is underlying confidence in the Australian rural property market after farmers have enjoyed their best run of seasons in more than a decade.
“Many farmers are in strong financial positions and have a lot of cash – it makes good long-term sense to be buying land,” Bennett says. “With global investment in Australian agriculture, the case is really quite strong because of investors’ desire to invest in diverse production zones and commodities.
“There is no real reason that their enthusiasm would change a lot with the demand for food security investment globally.
“Investors like the things we produce and the way we produce them and food production is a necessity despite what happens to the global economy.”
Gundaline station in Murrumbidgee, NSW, was sold for $120m.
On a scale front, Crown Point Pastoral’s purchases in the past year lifted its holdings to 9.2 million hectares, placing it at the top of the landholder leaderboard ahead of the ASX-listed Australian Agricultural Company (6.6 million hectares), Queensland government-backed North Australian Pastoral Company (6.1 million hectares), Jumbuck Pastoral Company (5.2 million hectares), and Williams Cattle Company and Macquarie Agriculture (4.7 million hectares each).
Crown Point’s acquisitions in the past 12 months have included the 733,700-hectare Mount Doreen Station northwest of Alice Springs, purchased from the Braitling family as part of a land and cattle deal worth more than $70 million. Additionally, Oldfield last month secured the 60,200-hectare Middle Creek Station at Katherine.
LAWD senior director Danny Thomas says in the past 12 months Australian farming families in particular had been assertive in their push for more farmland.
“Corporate farming families just made so much money in the last three years, there are a number who are looking to grow and grow aggressively,” Thomas says.
“In those heady days through 2021 and during 2022 you’d have six, eight or even 10 parties trying to purchase a property and that is where you’d see those breakout jumps in value, sometimes up to 30 per cent higher than the historical district value.
“Through late 2022 and into this year the market has normalised at these record land value levels.”
On the value front, PSP Investments – the pension fund for the Canadian public service including its world-famous mounted police force – increased its investment in Australian agriculture assets to more than $6 billion.
Maryfield Station, 200km south of Katherine in the Northern Territory, was sold in a huge $175m deal. Picture: Supplied
In the past 12 months PSP shelled out more than $100 million for one of Australia’s largest family-owned macadamia enterprises, Macadamias Australia, at Bundaberg in Queensland and secured 35 vineyards from Australian family-owned wine company Casella in a nine-figure deal.
The second-biggest investor, Macquarie Agriculture, with $3.2 billion in investments, continues to be an active player, paying $120 million for the Cowal Ag aggregation near Emerald in central Queensland last August while the third-biggest, TIAA-CREF, with $2.2 billion invested locally, forked out more than $70 million for the 344-hectare Macadamia Enterprises portfolio near Bundaberg last December.
Thomas says inquiry for rural assets worth more than $30 million is noticeably stronger compared to assets at the lower end of the market.
“Those that are in this game need scale and they have taken the opportunity to grow and future-proof,” he says. “There has been a resurgence in Asian investment and great enthusiasm from North America and European funds looking at investing billions in the next couple of years.”
Kidder Williams agribusiness expert David Williams says, on a global investment front, Chinese buyers have returned as active participants while North American funds are still very active in the horticulture and cotton sectors.
“Even though there is a tendency for prices to soften as interest rates rise with farmer-buyers, Chinese buyers plus others … will be enough to keep prices stable for the remainder of the year,” Williams says.
Elders Real Estate agribusiness investments general manager Mark Barber says farmland values are open to direction this year. “While there is some volatility creeping into agricultural operating conditions, it is likely that the relative performance of rural land as an asset class compared to other investment options is playing a strong role in investment decisions,” Barber says.
Loading embed…