Latest farmland foreign investment figures revealed

The number of approved foreign transactions for Aussie farmland has dropped following a period of subdued interest last year.

Foreign investor confidence in the nation’s rural property market is returning so far this year, following a period of subdued interest in the preceding six months.

The latest figures from the Foreign Investment Review Board reveal there was a 33 per cent decline in the number of approved investment proposals in the nation’s agriculture, forestry and fishing sector between July and September last year, compared to the previous quarter.

In the third quarter of last year, the FIRB approved 30 foreign transactions, down from 45 approvals between April and June 2023.

Subsequently the value of approved transactions dropped from $1.5 billion to $1 billion between quarters.

Headline farmland deals approved between July and September last year included the $85m transaction of the 13,496ha Jemalong Station, near Forbes, by Optifarm to AIMCO and New Forests’ Lawson Grains.

In Victoria’s west, renowned Chinese wool tycoon, Qingnan Wen of Tianyu Wool, also purchased the 1664.5ha mixed farm, known as Nerrinyerie, near Harrow from the Edgar family.

Australia’s largest importer of wool into China, Qingnan Wen of Tianyu Wool, purchased the 1664.5ha mixed farm, known as Nerrinyerie, near Harrow in the state’s Wimmera region.

LAWD senior director Danny Thomas said there were several instances last year where foreign institutional buyers pulled out of deals due to concerns about the difference between falling livestock prices and farmland values.

“Some funds were worried there was going to be a seismic shift in the market and they didn’t want to be caught out,” he said.

However, Mr Thomas said improved commodity prices and better than expected rainfall had heightened the sentiment of foreign investors into Australian agriculture.

“This year, at the top end of the market, in that range of $30 million or more, there are new funds, like impact and natural capital funds who have raised capital, and after being cautious at the end of last year, are looking to deploy that capital now,” he said.

“You also have the usual suspects, the array of Canadian pension funds and North American funds who continue to be active.

“Similar to last year, they are still getting that assistance from a favourable exchange rate to the AUD in that 65c range, which provides insulation into their deals.”

Mr Thomas said the majority of foreign buyers were interested in premium farmland assets, creating a gap in the second tier of the rural property market.

“If there’s not a large corporate family arrangement looking to accumulate farmland in the region, generally smaller buyers don’t have the borrowing power or the income to meet that price range at the moment,” he said.