Foreign investment in Australian farms jumps as food demand grows

The number of Australian farms owned by foreign interests has jumped significantly in the past year — see which countries are investing and where they are buying.

THE number of Australian farms owned by foreign interests has ballooned almost 10 per cent in the past year.

According to latest figures from the Foreign Investment Review Board, 9897 farm titles in Australia were owned by some level of offshore interest in 2019-20 – an increase of 853 or 9.4 per cent on the previous year.

FIRB’s annual farmland ownership report, released this week, showed foreign interests snapped a further 900,000 hectares of land during the 12-month period bringing the total to more than 53 million hectares, representing about 13.8 per cent of Australia’s farming area.

China is again the biggest offshore landholder with 9.2 million hectares – 8.4 million hectares of which is lease country – followed by the United Kingdom (7.3 million hectares), the Netherlands (2.8 million hectares), the US (2.75 million hectares), Canada (2.61 million hectares) and the Bahamas (2.2 million hectares).

In terms of freehold country, the Netherlands led the charge in 2019-20 with 1.65 million hectares followed by the United States (1.31 million hectares), Canada (907,000 hectares), the UK (882,000 hectares) and China (824,000 hectares). Canada’s freehold footprint more than doubled during the year, up from 435,000 hectares in 2018-19 while US-owned assets increased 7 per cent from 1.23 million hectares. Freehold area owned by the Netherlands, UK and China all fell.

Of the leasehold country, the biggest mover during 2019-20 was the US with a 45 per cent increase in its footprint, while China and Canada each bolstered its investments by less by than 1 per cent.

The high-profile Canadian surge in investments in recent years has been spearheaded by the Public Sector Pension Investment Board, which manages the superannuation of Canadian government workers, including the nation’s famed mounted police and armed services.

PSP Investments is now the single-biggest investor in Australian agriculture with land and water assets valued well north of $3 billion.

In February it finalised its $854 million takeover of 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.

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, with US-based TIAA-CREF – which has more than $1.7 billion worth of agriculture investments in Australia – late last year purchased 4000 hectares of dryland cropping country near Moree for a reported $28.4 million.

The Netherlands’ investors include public sector fund Stichting Pensioenfunds ABP, which has a sizeable stake in Macquarie Agriculture’s Paraway Pastoral Company and its 4.46 million hectare land portfolio. With 12 stations spread across 7.5 million hectares, Australia’s biggest landholder by size is S Kidman and Co, which is owned by an Australian-Chinese consortium.

According to the FIRB report, the biggest jump in foreign ownership in the past year was in Tasmania, which rose 7.3 per cent or an additional 26,000ha followed by NSW (up 4 per cent or 103,000ha), Victoria (up 3.4 per cent or 21,000ha), the Northern Territory (up 2.9 per cent of 411,000ha), Western Australia (up 0.7 per cent or 99,000ha) and Tasmania (up 7.3 per cent or 26,000ha). Foreign interests in South Australian farmland increased slightly, up 0.1 per cent of 6000ha.

Tasmania also accounts for the biggest level of foreign investment in farmland, with 26.2 per cent of the island state’s farmland (including forestry) owned by offshore interests. The Northern Territory comes in at No. 2 with 25.8 per cent followed by Western Australia (17 per cent), Queensland (11.8 per cent). South Australia (10.7 per cent), Victoria (5.6 per cent) and NSW/ACT (5.1 per cent).

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