‘Bulls..t’ that China snapped up Aussie farms, property expert says

The perception Chinese investors bought up “every second Australian farm” has been blasted as “bulls..t”. And now families are paying up to $100 million for properties – outbidding corporates.

Larundel Estate at Meredith, owned by Chinese multinational company Ruyi Group, was listed for sale last year.

The perception that Chinese investors bought up “every second Australian farm” in the past decade has been blasted as “bullshit”.

Rural property expert Danny Thomas, a senior director at LAWD, said there was a misunderstanding that there was “this enormous wave of capital that came out of China that came and bought up every second farm”.

“That’s bullshit,” Mr Thomas told the Global Food Forum in Sydney this week. “China’s presence in the market was amplified much higher than what it actually was.

“Some of those groups that have come over and bought agricultural holdings and had great aspirations have gone home – they have decided that doesn’t work, there are risks of execution, the market has got beyond them or they have had to live beyond the drought and that has effected earnings and their confidence to invest.

“There are still people out of mainland China that have retained their investments here – often motivated as safe haven investment, a place to store money.

Chinese-owned Van Dairy Group this week sold 11 dairy farms in northwest Tasmania for $62.5 million and billionaire Gina Rinehart is also understood to be selling several cattle stations in the Northern Australia to raise capital to buy out her Chinese partner in the famed S Kidman and Co pastoral business, which they bought in 2016.

CBRE agribusiness managing director David Goodfellow said the Chinese community was now motivated to start investing in Brazil and Argentina.

Mr Thomas said it was now mostly US and Canadian funds investing in Australian farmland. “North American principally and Europeans after that and then there’s a long distance down the Middle East and next to no one from Asia”.

He said farming families also had confidence now, post drought, who could access long term debt now at incredibly low rates.

“That takes them into a different market in terms of what market they can compete in,” Mr Thomas said.

“There’s a lot buying small holdings but there are others now where what is happening with their balance sheets and the long term debt they can access are making really large generational decisions.

“That $5 million to $20 million space in the market used to sort of be no-man’s land, it was very hard to find a buyer in that space.

“We see farmers now going head to head and good strong families going head to head with institutions right up to $100 million.”

Lucinda Corrigan, from Rennylea Angus in southern NSW, who also spoke at the forum, said it was a great time for generational family farming businesses.

“It’s also a good time for final generation farmers to exit because suddenly they can pick where they want to live,” she said. “It’s a good time to get out and take your capital.”

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