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Aussie super funds eye sale and leaseback investment opportunities

The investment strategy is well suited to the super fund industry that largely lacks experience and knowledge of farmland investing, according to Tim Altschwager, national director of transaction services rural & agribusiness at Colliers International, the real estate services company.

Australian superannuation funds are showing interest in the buy-and-leaseback farmland investment market, according to Tim Altschwager, the national director of transaction services rural & agribusiness at Colliers International, the real estate services company.

“Over the last year or so, we have seen an increase in enquiries from some large super funds, alongside other investment groups, that are looking to add some agribusiness assets to their portfolios,” Altschwager told Agri Investor. “And as those types of investor don’t have much experience or knowledge [of farmland investing], this is why leasebacks make sense.”

Superannuation funds have typically stayed away from the agriculture investment market, concerned by the need to report on a quarterly basis on assets that are much longer-term and often take a while to produce returns, according to sources. Some have also had a bad experience with the asset class in the past, citing poor management and poor returns. Christian Super is one example of a super fund that was disappointed by the performance of its first agriculture investment, as reported last year.

But in recent months there has been growing chatter about agriculture investment manager engagement with the super fund industry.

Altschwager’s comments follow the publication of a report by Colliers about sale and leaseback opportunities for existing landowners and farmers, Sale and leaseback: how it could benefit your business – which was published by the agency alongside consultant Grant Thornton last week.

The firms were encouraged to release the report as much of the agribusiness sector in Australia is looking for ways to expand and grow but is currently starved of capital, according to Altschwager. And this coincided with increasing interest in agriculture as an investment; “agriland and agribusiness are en vogue – everyone seems to want them in their portfolios”, he said.

Colliers is exposed to the demands of the super industry through its work with asset management firms, banks and other financiers that work closely with institutional investors, according to Altschwager.

Read Sale and leaseback: how it could benefit your business.