Capital appreciation

In addition to income from farming operations or leasing, agricultural assets offer the potential for significant capital growth. Average Australian farmland prices have risen in 17 of the last 20 years.

Capital-Appreciation-Farmland1

Although there are obviously wide variations in performance across different regions of the Australian Wheatbelt, the average compound annual price appreciation for Australian rural land over the last decade (1992-2011) was 9%, equating to a 133% rise in average prices over the period.

Investment returns

Farming is like any other business: all other things being equal, income is dictated by the quality of the management team. Even enterprises with similar soil, climate and business model can show a high degree of variance. This means tenant / manager selection is a critical component of the agricultural investment process.

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Investment style

Inefficiencies in the farmland pricing mechanism are one of least exploited opportunities to increase returns as a farmland investor. When it comes to buying agricultural assets, we are able to help our clients beat the market because of our unconventional approach to acquiring farms and the information advantage we have in the markets in which we specialise.

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Investing in Australian agriculture

Australia’s robust economy, strategic location and investment friendly business environment have made the country one of the world’s top destinations for foreign investment, with FDI inflows of over twice the OECD average (% of GDP basis, 2011).

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Geographic and sector focus

For investors, the choice of agricultural sector will be driven by your risk tolerance and overall investment objectives. As a general rule, arable agriculture (i.e. the cultivation of annual crops, in particular grain) is the least volatile farming sector.

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