Agricultural assets overlooked: DomaCom


By Daniel Paperny

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Australian financial planners needed to look beyond traditional markets for asset allocation, with the appeal of local agricultural assets often overlooked, according to property investing platform DomaCom.

DomaCom general manager of sales and marketing Warren Gibson said there needed be an educational shift regarding the attitudes of Australian fund managers, particularly in light of a “growing reluctance” from superannuation funds to engage in the local agricultural sector, despite interest from foreign investors.

“We’re all for overseas investment [in agriculture], but not [foreign] ownership of the land,” Gibson said.

“Our key concerns are that it doesn’t get much of a look in from [Australian] financial advisers and from investors. It [seems] to be a sector or an asset class that has no merit to local investors, but the truth is it’s quite the opposite.”

The comments regarding the sale of Kidman Station, a rural asset that covers 101,000 square kilometres and is home to 185,000 head of cattle, come in light of an ongoing Senate inquiry into foreign ownership.

Gibson noted a divide in the attitudes of Australian fund managers and their overseas counterparts, arguing the local agricultural industry was not garnering significant interest among local investors.

“Why aren’t the super funds investing? They could easily buy Kidman Station and keep it in Australian hands,” he said.

“Financial planners have traditionally not gone there because there’s been no vehicle for investment … there’s a re-education that’s required so [that] they will have something new to offer to their clients.”

DomaCom began a crowdfunding campaign in December last year aimed at raising awareness of the value of Australian rural property to local investors as a defensive asset for investment portfolios, providing a submission to the Australian Foreign Investment Review Board containing a series of recommendations regarding Kidman Station.

“This is a unique opportunity for every Australian to invest in part of Australia’s heritage and, at the same time, in a valuable investment asset with an indicative return of 8 per cent to 9 per cent per year,” the group said in a recent blog on the subject.

“Property is a favoured asset class for many younger Australians who have substantial time for the asset to appreciate. This investment is also an opportunity to have an active interest in Australia for all our futures.”

While DomaCom had received 4500 expressions of interest amounting to a total of $67 million worth of investment for a potential Kidman Station bid, Gibson said the company was in “advanced discussions” with a consortium to fund the purchase of the business in a separate transaction to the land.

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