"There are so many positives in Agricultural property at the moment and Asian investors in particular are in pursuit of investment opportunities in Australia as an alternative to the US, according to Nick Cranna, Valuer of Rural and Agribusiness at Colliers International."

"We have noted that the number of parties undertaking Due Diligence to invest in Australia has been on the increase over the last 12-18 months."

Phil Schell, Director of Rural & Agribusiness at Colliers International agrees, "There is no doubt that the number of inquiries we are filtering at the moment through our international contacts has increased two fold on 2008."

"They are keen to get as much information as they can on the agricultural investment opportunities and running alongside the large scale investors are some smaller buyers looking for a similar entry point."

"Predictably many are interested in commercial real estate but what has now emerged is the strong interest for rural property. The diversification on offer in the rural property sector is extremely appealing to international investors."

Mr Cranna believes that Chinese investors in particular are seeing the enormous opportunities to acquire Australian agricultural properties and the release of high end portfolios such as Timbercorp, Constellation, Great Southern and Fosters has only encouraged even more interest from these investors.

"Importantly, the opportunities being presented to the market not only accelerate entry into the Australian rural property sector at an attractive price point but offer large economies of scale."

"The reality is, it's difficult to replicate the opportunity to acquire asset portfolios of this size anywhere in the world and the opportunity to purchase an established agricultural asset with a mature cash flow is also extremely rare."

"Not only are the rural properties on offer geographically diverse, they cover a wide range of land uses and many of the investments are established with long leases available."

Mr Cranna says, these investors are already familiar with the resource sector and the confidence to invest here is immense with the $50 billion dollar Gorgon gas deal representative of that.

"Investors from other Asian centres are looking for the same long term possibilities within other sectors of the property market but appear to be specifically targeting agriculture."

Olam International is a great example of this entry in Australia after the recent announcement of their agreement to acquire 8,096 hectares of planted almond orchards and 40,825 mega litres of permanent water rights from Timbercorp Limited and its associated entities through its liquidation process.

The total investment consideration is A$128 million in cash and the acquisition allows for an expansion into Australia and ultimately make Olam Australia's largest almond grower.

Mr Cranna says, "International investors are seeing the value in the opportunities on offer because of the GFC and ultimately this enables them to strategically gain a long term foothold in Australia at a lower risk than investment in the US.

"Asian investors, especially the Chinese have always had a hunger for commodities."

"Add to this the value-add potential on offer within the agricultural sector and we have a definitive international investment avenue for them."

"Australia's proximity to the key export markets China, India and Japan also opens up huge export potential for these investors."

"They see this as a significant upside to the investment as it provides the means to capitalise on increasing export volumes over the longer term."

"This factor together with the lower risk of investing in Australian agricultural property is one that is expected to boost activity levels moving forward and likely increase the future scrutiny of the US dollar."

For further information please contact:

Katy Dean
State Research Analyst
Colliers International
Tel: +61 8 8305 8806
Email: Katy.Dean@colliers.com

Phil Schell
Director, Rural & Agribusiness Investment Sales
Colliers International
Tel: +61 8 8305 8891
Mob: +61 418 809 849
Email: Phil.Schell@colliers.com

Nick Cranna
Valuer, Rural & Agribusiness
Colliers International
Tel: +61 8 8305 8846
Mob: +61 421 709 915
Email: Nick.Cranna@colliers.com

 

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