Written by: Duncan B. on 4 January 2025
2024 saw billions of dollars worth of Australian farmland and agricultural businesses change hands in a market dominated by institutional buyers, overseas buyers and wealthy individuals.
Canadian and US pension funds were again among the biggest buyers of Australian farm assets. Even a Utah-based subsidiary of the Church of Jesus Christ of the Latter Day Saints paid over $300 million for a 26,885 ha cattle and cotton growing property in Queensland.
US investors were behind the three biggest agricultural property transactions for 2024, which saw more than 265,000 ha change hands for more than $1.2 billion. Canadian pension fund PSP was involved in some major purchases, as was US pension fund TIAA-CREF.
Canadian and US pension funds are control Australia’s largest summer and winter cropping operations. Canada’s PSP, the largest investor in Australian agriculture by value, control over 230,000 ha of cropping operations, producing winter cereals, oilseeds and cotton.
Although overseas purchase of Australian farmland continue at a high rate, Foreign Investment Review Board approved investment proposals for the agriculture, forestry and fisheries sector was $5.3 billion for 2023-24. This was a 34% drop on the previous year. FIRB approvals for agricultural investments have been valued at between $7 billion and $8.5 billion since 2016-17, except for the COVID year of 2020-21. One reason given for the fall in investment is the lack of suitable properties ($100 million or more) of the type that foreign investors seek.
Experts are predicting that foreign investors, especially from the US will be back in the market in a big way this year as the US corporate sector is posting record profits. The corporates will be looking to invest in international markets.
One factor making Australian farming attractive to foreign investors is the difference in the average value of agricultural land in Australia ($9184 per ha), compared to the US ($16,200) and Europe ($17,500). This difference allows foreign investors to make a healthy return on their investments.
This means that more of Australian land will pass into foreign hands!
No comments:
Post a Comment