The Australian | September 03, 2009
ASIAN investment groups are likely to be the main buyers of Australian rural property in coming months, as industry commentators foreshadow a rebound across the sector in the year ahead.
Last month, Cubbie Station cotton farm -- and its licence to store enough water to fill Sydney Harbour -- were put on the market through an international tender closing on September 30.
It and two smaller properties were valued at more than $450 million at June 30.
Jones Lang LaSalle managing director Stephen Conry, who is marketing the 93,329ha station in southwest Queensland with JLL investments director Geoff McIntyre, has already held meetings with potential overseas buyers.
"There has already been interest from Asia and Europe and we would expect some interest from the US," Mr Conry said.
The federal government is also under pressure to use some of its $3.1 billion water buyback fund to buy Cubbie, with its 538,800 megalitres of water storage.
The main properties are Cubbie Station and the Anchorage, as well as Aspen, a smaller irrigation holding in the St George irrigation area.
Ray White Rural chairman Paul White said there was interest in Australian rural property from Chinese, Malaysian and Indonesian investment groups, looking to secure their food supply for the future.
"They have been doing a lot of investigations ... and we think they will soon start to do some quite strong buying," Mr White said.
He said some of the groups were close to securing big properties in northern NSW and Queensland.
Among the major investors are Japan's Marubeni Corp, which owns cattle-farm operation Rangers Valley feedlot, and Korean group Samsung, which owns cattle properties in NSW.
Metro Meat, controlled by Chinese government-owned China International Trust and Investment, has also been a player in Australia's cattle industry.
Offshore investors are likely to be attracted to large aggregations such as the Four Arrows Group, owned by former Fairfax chairman Rodney Price.
Mr White said a sharp rebound was coming in the sector as demand returned and the local economy stabilised.
Also coming back were local farmers who wanted to expand their holdings.
Webster Nolan Real Estate director and founder David Nolan said the worst of the fall in rural values was over.
"If what we've got is what we are going to have economically, then I think the values are here to stay," he said.
At the same time, Mr Nolan said, investment sentiment had changed.
"I think there's a lot of money trying to find a home in rural Australia," he said.
Mr White said that in the past few weeks, some properties at auction had received up to nine registered bidders."These sorts of registrations are quite unusual ... it's showing a lot of interest really coming back on to the market."