QIC head of natural capital Tom Murphy joins the Australian Ag podcast

Australia’s rural property market will look vastly different in the future as emerging environmental markets attract alternative property buyers. [FREE TO READ]

Expect Australia’s rural property market to look vastly different in the future as government and private businesses look to snap up farmland for its production potential along with its environmental value.

Tom Murphy, the head of natural capital at the Queensland Investment Corporation, the $100B pension arm of the Queensland government, said the emergence of natural capital markets will draw new buyers to the nation’s rural property market.

“I think it’s going to be a real transformation in the investment in large-scale land holdings from very different investment sources than it has been in the past.” Mr Murphy told the Australian Ag podcast.

“In the past you’d have investment managers or global institutional funds investing in agriculture and those large-scale private family operations.

“But what you’re also going to start to see is corporations investing in large-scale land holdings because they’re trying to generate their own environmental offsets to offset their impact.

QIC head of natural capital Tom Murphy.

“You are increasingly starting to see state and federal governments globally starting to look at their own security in the land, to secure their own offsets for their own operations.”

QIC has recently made its first two forays into the natural capital market, paying more than $30 million for 8300ha Stuart Creek station near Roma, the last remaining piece of the Packhorse Pastoral portfolio. Their first purchase by their natural capital division was a 600ha irrigated sugarcane property south of the Mackay last year.

QIC is also majority owner of the 140-year-old North Australian Pastoral Company (NAPCo), which spans 14 properties and more than six million hectares.

“In owning that asset (NAPCo) and managing that asset, we started to realise that it was actually a very valuable natural capital asset, which sort of was the origins of the natural capital strategy,” Mr Murphy said.

“With Stuart’s Creek what we were looking for was a pastoral acquisition that was really aligned with our mandate, and that mandate was commercial agricultural operations that could also deliver environmental outcomes across either carbon sequestration, biodiversity, preservation or water quality, particularly reef water quality.

“In some ways, we’re agnostic in terms of the actual agricultural sector or commodity. As long as that actual agricultural asset is a quality agricultural asset with strong commercial returns.

“Our first screen is looking for assets that can deliver on the environmental market and as an essential second screen, can it be delivered in partnership with commercial agriculture.”