Minimal im­pact on sales

Central Queensland News - - RURAL WEEKLY - AN­DREA DAVY An­drea.davy@ru­ral­

THE new rules for for­eign in­vest­ment on the sale of Aus­tralian farm­land will not make a huge dif­fer­ence to the ru­ral prop­erty mar­ket.

That’s the opin­ion of Ray White Ru­ral Queens­land di­rec­tor Jez McNa­mara.

Last week, Fed­eral Trea­surer Scott Mor­ri­son an­nounced the in­tro­duc­tion of a 30-day ad­ver­tis­ing clause for prop­er­ties worth more than the Fed­eral In­vest­ment Re­view Board’s $15 mil­lion thresh­old. The new rule means any prop­er­ties val­ued at more than $15 mil­lion would have to be on the mar­ket, and ad­ver­tised widely, for 30 days be­fore an in­ter­na­tional bid­der could buy them. But in Mr McNa­mara’s ex­pe­ri­ence, higher-value agri­cul­ture prop­er­ties were gen­er­ally listed on the mar­ket for 30 days any­way. He said most of the time these kinds of prop­er­ties went through an ex­pres­sion of in­ter­est process or an auc­tion cam­paign.

“Most prop­er­ties have a 30-day mar­ket­ing pe­riod any­way,” he said.

“Nor­mally you look at five to six weeks of mar­ket­ing be­fore the close of ex­pres­sions of in­ter­est or the auc­tion.

“The only prop­er­ties that it may af­fect are off-mar­ket deals, which are done through pri­vate ne­go­ti­a­tions or done di­rectly through an in­ter­ested party and a ven­dor.”

Speak­ing broadly for his of­fice, about 95–97 per cent of prop­er­ties were listed on the mar­ket, and only 3–5 per cent were sold through off-mar­ket deals.

“We find mar­ket­ing brings more buy­ers to the ta­ble,” he said. “It cre­ates com­pe­ti­tion for our ven­dors and means the prop­erty will re­ceive the best price.”

When an­nounc­ing the rule changes, Mr Mor­ri­son touched on con­cerns that were raised dur­ing the sale of S Kid­man and Co.

“Con­cerns around the abil­ity of Aus­tralians to par­tic­i­pate in the sale process of agri­cul­tural land ac­qui­si­tions have been a fac­tor in my pre­vi­ous for­eign in­vest­ment de­ci­sions, in­clud­ing ap­proval of the sale of S Kid­man and Co Lim­ited,” he said. Mr Mor­ri­son twice re­jected Chi­nese-led bids for the iconic cat­tle hold­ings be­fore ac­cept­ing a $386.5 mil­lion bid from Aus­tralian Out­back Beef, a con­sor­tium of Gina Rine­hart’s Han­cock Prospect­ing and Chi­nese com­pany Shang­hai-CRED. In Mr McNa­mara’s ex­pe­ri­ence, it’s not nor­mally Aus­tralian bid­ders con­cerned about their ac­cess to deals.

“It’s pretty well the op­po­site more of­ten than not,” he said.

“For­eign buy­ers have to go through a process any­way. They have al­ways had to ap­ply through the FIRB be­fore they can bid at an auc­tion or put in an ex­pres­sion of in­ter­est.

“That ap­proval can take six weeks.

“I think it would be very rare for a nor­mally mar­keted prop­erty to have any is­sues as far as this new law goes. I think what it per­tains to is some higher-end as­sets that are qui­etly mar­keted, prob­a­bly not through an agent, but through an ac­coun­tancy firm.

“Usu­ally it’s fairly well known they are on the mar­ket.” Although it’s still early days, Mr McNa­mara said the large-scale farm­land mar­ket was shap­ing up to have strong in­ter­est this year.

“The last fi­nan­cial year we saw big sales in cit­rus and cat­tle prop­er­ties,” he said.


FOR­EIGN IN­VEST­MENT: Fed­eral Trea­surer Scott Mor­ri­son an­nounced a 30-day ad­ver­tis­ing clause for prop­er­ties worth more than $15 mil­lion.

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