Australian Farmland Investments
We have already discussed at length the case for farmland investments and the global macro trends of increased population growth combined with the lack of arable farmland. Agriculture and farmland investments allow us to track and benefit from increasing commodity prices without the volatility of stocks, whilst simultaneously providing an excellent hedge against inflation. We offer an excellent opportunity to leverage these trends in an Australian wheat farmland investment.
A major philosophy at GreenWorld is that we want to search out undervalued assets and investments and then wait for prices to rise – essentially to arbitrage such differences in our favor.
Against that background, the wheat belt of Australia offers a major anomaly. The price of farmland in this region costs just a fraction of average prices paid in North America and Europe. In 2011 a hectare of ‘raw’ land in western Australia (i.e., not previously farmed or allowed to lie fallow for more than five years) suitable for wheat production sold for over USD$3,000, compared to over USD$7,400 in North America (and three times that in prime farming regions of the midwestern United States) and over USD$22,000 in Europe, according to the 2012 ‘International Farmland Focus’ by Savills, the leading land agent.
In fact, the price of arable land in Australia is on a par with prices in parts of Africa and Eastern Europe – despite the fact that Australia offers investors many more ‘comforts’ than other regions of the world, in terms of political, legal and economic risks.
Furthermore, GreenWorld is also on the right side of the “China trend” in this investment as well, as China has been investing heavily in Australian farmland. Its’ very simple - wherever China is investing, we want to be close behind! If China is focused on Australian agricultural investments, that alone is a key reason to look closely at this opportunity. In addition, legendary commodities investor Jim Rogers recently opened a US$350 million Australian farmland fund.
Investors are offered farmland at only £3,000 per hectare. There are NO ongoing management charges or initial registration fees, and investors are asked to commit to the project for a minimum of 5 years. Between years 5 and 8, the project developer intends to seek a buyer for the whole project in order to potentially realise a significant medium term profit. Given the food trends and the large number of Chinese state-owned agriculture firms already purchasing Australian land, there is a very high degree of confidence that the land can be sold quite profitably on behalf of investors.
At the current purchase price, the return from the crop yield can be projected to average out to circa 9% per annum, over the eight years. Fluctuations in levels of annual rainfall will drive fluctuations in ‘realised’ yield each year, but we regard this projected income as a minimum return without further rises in the global price of wheat.
Here is an article frominvesting website CNBC on agriculture investments in Australia: Food The Next Commodities Boom for Australia
Please e-mail us at email@example.com to receive information on this compelling Australian farmland investment! You can also download a short overview that provides more information on GreenWorld’s Australian farmland investment by filling out the form below, and if you are interested we would be pleased to discuss the project in more detail with you.