This article is from the Australian Property Journal archive
KOREAN based private companies are the largest foreign owners of rural property in NSW, exceeding 500,000 ha compared to the nearest rivals from Switzerland with just under 65,000 ha, according to a PRDnationwide report.
PRDnationwide’s Foreign Ownership of Primary Production Land in NSW report, found Korean-based The Ho Myoung Farm company is the largest investor in NSW, with land ownership of estimated to be between 500,000 to 600,000 ha, as at February 2012.
The company, which is owned by the Korean Young An Group owns land in Wanaaring in the state’s Orana Region.
PRDnationwide analyst and report author Oded Reuveni-Etzioni said the aim of this report is to identify the largest foreign land owners in NSW and suggest measures to ensure that the use of land is consistent with the representations made by the owners to the Foreign Investment Review Board.
“One concern further hindering foreign ownership legislation, is that available information regarding foreign investment in the sector is inadequate to support policy decisions,”
The second largest owner was the Swiss Australian Farm Holdings from Switzerland with 63,357 ha in Far Western; followed by United Kingdom hedge fund MHPF with 41,490 ha which has $92 million invested in South Easter, Central West, Murray, Riverina, New England and Orana.
UK-based private company Clyde Agriculture owns 39,056 ha and China’s Natsun Holdings/Nanshan closed the top five list with 29,000 ha.
Reuveni-Etzioni said Cargill is the most diversified company currently transacting in the market, with a recent purchase in the Riverina District.
With its’ parent company in the United States, Cargill Australia owns both the commodities management (abattoirs, feedlots) as well as the ownership of AWB Grainflow, with grain receival sites throughout the state.
Through its Black River Asset Management subsidiary the company also owns a large share in BFB Pty Ltd, a large land owner in the Riverina and Central Western Districts.
An analysis of prices per ha of land revealed a range between $2,229 per ha (MHPF) to $2,647 per ha (Westchester) for portfolios that are weighted towards the centre of the state.
Further west the rate per ha declined together with the carrying capacity of the land. Examples include Clyde Agriculture ($310 per ha) and Swiss Australian ($88 per ha). Top prices were paid by Shenhua Watermark for land in the Breeza area, averaging $10,917 per ha.
The research found Shenhua Watermark Coal is amongst the largest foreign owners of land in NSW in terms of dollar invested.
“The company is currently in the process of obtaining mining licenses for land purchased in 2009 and 2010,” he said.
Reuveni-Etzioni said whilst the aggregate of the area shown is miniscule compared to an approximately 56 million ha of agricultural land in NSW, there are many gaps in information due to delayed settlements and the secrecy that often surrounds foreign investment transactions.
“Given the limited information that is readily available, it is likely that the true extent is larger. Furthermore, the structure of ownership is often complex, with foreign parent companies owning shares in several Australian subsidiaries,”
Reuveni-Etzioni has made recommendations to increase the transparency of foreign investment in Australian and NSW.
“These include the establishment of a state registry to track the foreign ownership of land, the examination of the different methods of ownership with a special attention given to trust structures and the major shareholders of large agricultural land owners.
“Ensuring foreign investors’ representations and undertakings, as to the use of the land, are enforced upon settlement and more attention has to be paid to the ownership and control of facilities such as abattoirs, ports and dairies, as they often bare greater risk to the national interest than the farmland itself.”
PropertyReview
