Aussie Super Farm Sell-Off Predicted by TIAA CREF

U.S.-based investment fund, TIAA-CREF forecasts that within the next decade Australia will see a large number of agricultural properties come onto the market because of the country’s ageing farmer population and a lack of sons and daughters willing, or able to inherit operations.

Since 2007 TIAA-CREF has bought Australian farmland to the value of almost $1 billion, and plans to continue expanding its holdings, and attracting Australia’s superannuation funds to its land investing model as the decade progresses, and increasing numbers of agricultural properties become available.

Ninety five percent of Australia’s farms are family owned, and there is a considerable lack of succession planning in place. In addition, the median age of Australia’s farm worker population is 50 – 10 years older than the average age of the country’s general workforce according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

To capitalize on the country’s shifting demographics and the acquisition opportunities that will develop as a result, the fund is establishing an office in Sydney. TIAA-CREF agricultural land manager, Westchester, Randall Pope tells Australian publication, The Land, “The average age of farmers is increasing and there has not been a lot of succession planning done, so we could be on the cusp of seeing more land come available than we have in the past several years as a result of that. It is very difficult to divide a farm but easier to divide dollars.”

Although the funds is not planning on acquiring the S. Kidman cattle operations and stations that were recently placed on the market, the fund states that as it has been scaling up its portfolio, it has noticed an increase in interest from offshore and local institutional investors in its unique leasing strategy as opposed to a direct operating strategy, which is significantly more volatile. As interest grows, creating a larger pool of potential partners, TIAA-CREF hopes it expands to include the country’s superannuation funds.