澳洲Australia property Agricultural investment property rent val


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What would you ask for rent (% of Capital value) for an agricultural property?
The property has no improvements apart from a boundry fence (and therefore requires no maintenance.) It is leased for cropping. Lessee is using best practice management to assure the sustainability of the property. Lease is initially for five years, after 3 years a further 3 years is added on, so at any time the landlord is assured of between 2 and 5 years of rent. Rates are approx 0.35% of land value.  

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Graingrower said: ↑
What would you ask for rent (% of Capital value) for an agricultural property?
The property has no improvements apart from a boundry fence (and therefore requires no maintenance.) It is leased for cropping. Lessee is using best practice management to assure the sustainability of the property. Lease is initially for five years, after 3 years a further 3 years is added on, so at any time the landlord is assured of between 2 and 5 years of rent. Rates are approx 0.35% of land value.Click to expand...
We leased a place to a lessee for 4.5% of its value for 5 years. We paid all rates etc. It was not pegged to CPI.

Poor lessee got the driest year on record in 2006 followed by 3 more ordinary years followed by the wettest year on record. Are we glad we leased that place out.  

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We lease 400 hectares of farming land for $220 a hectare per year. Hard to say what it's worth? I'd say it would sell fairly easily for $6000 a hectare, but a sale was made last year for $7500 a hectare, so I don't know if that will be a new yardstick?

So $220 for land worth $6000 is a return of 3.6%. It includes the use of 1000 tonnes of good silo storage, and we run the place as if was ours. It's a nice arrangement for us.

The owner is a very nice and wealthy ex Sydney resident who has now retired here on his farm in a mansion. He bought the farm for bugger all years ago, so I'm sure he's not too worried now at getting such a small return for the land that's leased. The farm is about 1200 hectares. We just lease a third of it. The rest is run as a cattle fattening operation by a manager.


See ya's.  

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Thanks TC. Do you think that someone would buy land for a 5 year guaranteed 3.6% return?
I bet those silos have paid the rent for you a time or two :rolleyes:  

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Graingrower said: ↑
Thanks TC. Do you think that someone would buy land for a 5 year guaranteed 3.6% return?
I bet those silos have paid the rent for you a time or two :rolleyes:Click to expand...

I think there would be people out there who would do that. It wouldn't be for everyone, but anyone who realises whats coming up regarding food supply and demand and can see what a great investment farm land is would be keen.

The silos are great. We have 3,000 tonnes ourselves, so 4,000 all up including them.

See ya's.  

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About 3-5% ($10 to $20 and acre) is common where I am from (in the Mallee). However most leases are not publicly advertised.

I was reading in the Financial review the other day that a listed Singapore company, is buying small cap grain growing properties in WA, paying growers to sow, harvest, manage and then plan to sell in ten years (can't remember the specifics sorry).

Catch
Patrick  

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pats said: ↑
I was reading in the Financial review the other day that a listed Singapore company, is buying small cap grain growing properties in WA, paying growers to sow, harvest, manage and then plan to sell in ten years (can't remember the specifics sorry).Click to expand...
Can't see them making much money out of this myself. Are they going to use the farmers who owned the properties as managers. If they are selling up then they won't be the best farmers, will they? Maybe the company plans to make a huge capital gain on the land because food is becoming scarce and they think that farmland will triple in value. If it does that then 3% return for an investor would be cheap as chips, and 5% for the farmer would be ok too.  

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Graingrower said: ↑
Are they going to use the farmers who owned the properties as managers. If they are selling up then they won't be the best farmers, will they?Click to expand...
We had the best farmer in our district sell up this year. Could have farmed for another ten years if he wanted to.  

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I had the same view.

There was also another instance I note in WA where a company (investors) was funding the growing of grain crops and sharing risk/profit.

I think this was the link http://www.aacl.com.au/farmers_info.php, althought not much info on the site. Still on interesting concept though.  

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pats said: ↑
I had the same view.

There was also another instance I note in WA where a company (investors) was funding the growing of grain crops and sharing risk/profit.

I think this was the link http://www.aacl.com.au/farmers_info.php, althought not much info on the site. Still on interesting concept though.Click to expand...
If you were on your last leg (due to drought, etc), and wanted to keep farming this would seem a viable option.  

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