Top North American pensions’ ag portfolios to surpass $1bn in Australia

A boom in inward institutional investment and a push by high-net-worth individuals is cranking up competition for agriculture assets in Australia, according to a seasoned industry insider.

Colliers International, a real estate advisory firm, today announced that it had promoted Rawdon Briggs to become its head of rural & agribusiness after witnessing a near-doubling of that team in the past two years. Speaking to Agri Investor, Briggs said his objective was to grow the agri transactions team another twofold over the coming 18 months, while also getting the firm more involved with capital market deals in the $100 million to $300 million bracket.

The driver behind such hopes, he explained, was a steep increase in investor interest in the Australian ag market.

In Australia we probably won’t see an increase in the stock in the market until we have two interest rate rises
Rawdon Briggs, Colliers International

“Three years ago, foreign investors were generally having conversations on their own. But today we’re seeing quite heated competition for assets in that $50 million to $200 million class, particularly. There are multiple bids on most assets,” he remarked.

Behind this appetite lay the evolution of “agribusiness-type assets” into an investable asset class, he said, noting that little institutional capital was placed in the Australian ag market even a few years ago.

He said institutions such as PSP Investments, the Canadian pension, had deployed “quite a few hundred million dollars” in the country. “Some of these pension funds will surpass a billion dollars in the next two years in the Australian marketplace.”

Asian entry

Briggs admitted that much of the capital had so far come from North America, with notable exceptions from Hong Kong in the form of CK Asset Holdings (formerly Cheung Kong Property) and Shimao Group, which have both also invested hundreds of million dollars in Australia’s ag sector.

“We’ve seen quite a lot out of Hong Kong, but I think Mainland China will make quite sizeable investments into the Australian agri space over the next two years.”

Lack of dealflow may put a brake on this, if only temporarily, he cautioned. “There is a lack of willing vendors at the moment. In Australia, we probably won’t see an increase in the stock in the market until we have two interest rate rises domestically.”

Briggs was previously Colliers’ national director for transaction services and head of the Queensland rural & agribusiness team.