Who Owns Australia’s Farms 2020 — Biggest players in Australian ag

North American pension funds are now the biggest players in Australian agriculture, a special AgJournal investigation into who owns Australia’s farms can reveal.

Artwork for The Weekly Times online.

CANADIAN cops, American college professors and Dutch public servants have emerged as the billion-dollar barons of Australian agriculture.

A special AgJournal investigation into who owns Australia’s farms can reveal the three biggest investors by value – Canada’s Public Sector Pension Investment Board, Macquarie Agriculture and TIAA-CREF (Nuveen) – own 6.3 million hectares collectively and have an estimated $7.4 billion worth of local land, water and infrastructure assets under management.

PSP – which manages the superannuation of Canadian government workers, including the nation’s famed mounted police and armed services – leads the charge with assets valued at more than $3 billion. In the past 20 months alone, PSP has been involved in more than $2.3 billion worth of transactions locally including two of the biggest deals in Australian agriculture’s history, each worth about $850 million.

In second place is the Australian-controlled Macquarie Agriculture funds of Paraway Pastoral Company, Lawson Grains and Viridis Ag, with about $2.7 billion in assets across a portfolio of properties spanning 4.7 million hectares. The funds, which have an additional US$250 million invested in Brazilian agriculture, are backed by a mixture of domestic and offshore investors including The Netherlands’ public sector pension fund Stichting Pensioenfonds ABP.

Rounding out the top three is the New York-based Teachers Insurance and Annuity Association of America and College Retirement Equities Fund, which, through its subsidiary Nuveen, is the biggest investor in agriculture globally. It has put together a portfolio of Australian land and water assets worth an estimated $1.7 billion.

While the value of portfolios is hard to ascertain given varying costs of land, water and infrastructure assets, other major investors include the ASX-listed Rural Funds Group, Warakirri Asset Management, Australian Agricultural Company, Australia’s richest woman Gina Rinehart, as well as North Australian Pastoral Company and Consolidated Pastoral Company.

Global interest in Australian farming assets remains buoyant, with about 52.6 million hectares of Australian farmland foreign owned, according to the latest data from the Federal Government.

The UK is the biggest investor, with 10.2 million hectares, followed by China (9.2 million hectares), the US (2.7 million hectares), the Netherlands (2.5 million hectares), Bahamas (2.2 million hectares) and Canada (2 million hectares).

The Canadian surge in investments in recent years has been spearheaded by PSP, which in February finalised its $854 million takeover of the ASX-listed Webster Limited – Australia’s fourth-oldest company and one of the nation’s biggest landholders with more than 340,000 hectares and 153,000 megalitres of water.

Late last year PSP paid about $850 million in a landmark land and water deal involving 12,000 hectares of almond plantations, near Robinvale in northern Victoria, and almost 90,000 megalitres of high-security water. The water component of the deal was worth $490 million.

In another show of strength from North America, Boston-based Hancock Agricultural Investment Group earlier this year paid $120 million for 19,877 hectares of cotton and almond farms at Hillston in NSW from Harvard University’s endowment fund, while TIAA-CREF last year purchased 4000 hectares of dryland cropping country near Moree from the Turnbull family for a reported $28.4 million.

Other major transactions in the past year have included Daybreak Cropping’s $97 million purchase of the Erregulla Plains property in Western Australia.

Companies to wind back their operations include Queensland pastoral giant Clark and Tait, which has so far off-loaded six of its seven stations including the sale of the 133,744-hectare Mantuan Downs at Springsure to the North Australian Pastoral Company for $92.6 million including stock. Chinese-backed Rifa Salutary last year listed its portfolio of five aggregations in NSW and Victoria, with a combined value of more than $150 million. This included the 2406-hectare Blackwood Station in Victoria’s Western District, which sold to barrister-to-the-stars Allan Myers and his Dunkeld Pastoral Company.

CBRE Agribusiness director Danny Thomas says the rural property market remains “very robust” despite the economic impacts of the coronavirus crisis on the global economy, adding agriculture is “one of the few sectors with a bright outlook”.

Thomas describes the “macro settings around the exchange rate, food security, very low debt, banks wanting to lend into the sector” as particularly strong. Added to this is improved seasonal conditions across most parts of eastern Australia, particularly in NSW and Queensland, which have been subject to successive years of drought.

As a result, Thomas says, demand for rural property from investors who are “well capitalised, enjoying a good season and viewed favourably by their bank” is expected to increase during the mid to latter part of this year. “I think you’ll see a very active land purchasing market, a very active land leasing market, and people wanting to do sharefarming as well,” he says. “All of that collectively bodes well for activity.”

Thomas says a further incentive for farmers to grow their businesses is the Australian Government’s $150,000 instant tax write-off on assets. “It gives a lot of farmers the opportunity to review their farming equipment. And if they review their equipment, they are probably going to want more country to put it over,” he says.

From a demand perspective he says permanent plantings remain popular with almonds still very much “the flavour of the month”.

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