“At Southern Ag Management we will walk you through the process of buying farming property in Australia.”
Our agricultural investment strategy is based on the concept of value investing. Anyone can buy a farm, but understanding the productive capacity of the land and its ability to generate a return is key to the long term value of the property and its capacity to increase the underlying capital value.
Through our experience of consulting to clients running over $100 million dollars’ worth of agricultural assets in Southern Australia we have generated production experience across a wide range of rainfall zones, soil types and enterprise’s including:
- broadacre farming,
- horticulture and
- dairy industries,
that allow us to perform full farm due diligence reports that identify the best assets to invest in. This understanding of how agricultural businesses run across a wide area of Australia puts us in a unique position to help clients develop a solid farmland investment portfolio.
We use this as a starting point to understand your investment requirements and put some parameters around potential areas for your agricultural investment. Having clarity of purpose is paramount in successful investing of any nature, this is also important in agricultural investments. We walk through the investment process educating you, the potential investor around the nature of different investments outlining risks and benefits to help improve decision making and outcomes. For foreign investors this can include help to find legal advice.
Identification of farming property
We run a full due diligence program prior to purchasing any agricultural property to ensure it meets our investment grade standards. This report can include
- Suitability of farming property type to meet investor goals
- Physical inspection of the property
- Soils – Soil type and physical characteristics; production potential, agronomic capacity, remediation requirements, soil health, nutrient levels, soil test if required
- Mapping of the property
- Water resources
- Infrastructure and equipment assessment
- Detailed climate assessment – Rainfall, reliability of growing season rainfall, temperature, likelihood and effect of undesirable weather events (drought, floods, heat waves, frost etc).
- Farm opportunity and future capabilities
- Assessment of future expenditure required on the property
- Production analysis based on historical production data and potential production
- Financial analysis of likely investment returns including economic assumptions
- Facilitating a sworn valuation of the property if required
- Legal due diligence in regard to current ownership
- Current land use and zoning – Comment on future development potential, effect on returns.
- Environmental – Soil or landscape degradation and risks, environmental standards compliance issues.
- Management and production history – Farming intensity (stocking rates and rotations), fertiliser and nutrient history, cropping history, yields and production averages and variability.
- Management recommendations – Optimal production recommendations, opportunities for broadening income streams, likely future production potential, effect on returns.
- Post-acquisition expenditure – Report on additional capital investment in infrastructure or capital stock that may be required or desirable for the property to achieve optimal productivity.
- Financial and investment analysis – Past performance, likely future performance, investment analysis, future lease rates, likely future returns (from tenanted and operational management models).
- Valuation analysis – Comparison against other properties currently on the market, comparison with recent similar sales, price and sale history.
- Purchase recommendations – Assessment of buyer demand and local market sentiment, seller motivations, financial status and debt levels, recommended negotiating strategy, target, likely and maximum viable purchase price.
- Important disclosures – History of environmental issues, pests and disease history if any.
- Title and tenure – Ownership, limitations to use, leans and encumbrances if any.
Contract Negotiation of Farming Properties
We can negotiate the purchase contract for your rural property including terms and conditions to ensure the best outcome for you.
Contract Of Sale For Agricultural Properties
We will recommend lawyers who have experience in contracts for sale of agricultural land that can help walk you through this process
Lease or Management of Rural Properties
Once purchased we will need to execute your plan for either leasing out your rural property or actively managing the farming property. We can find and vet potential lessee’s, or set up the active management plan including reporting structures, hiring of farm labour, farm equipment purchasing and management of contractors. For more information on asset management click here