Mum and Dad investors could get the opportunity to become part-owners of one of Australia’s agricultural icons, Kidman Station, via a radical proposal to open up the sale to crowd-funding.
Crowd-funding has typically been associated with retail and commercial property, but this proposal, the brainchild of seventh generation pastoralist Stephen Burgin and crowd-funder DomaCom, would put the $360+ million Kidman properties “into play” for retail investors.
Burgin says this is a “wonderful opportunity” to give Australians the opportunity to invest in part of the country’s agricultural heritage. Opinion polls show there is enormous concern among ordinary Australians about retaining our “food-bowl properties”, as well as the businesses that flow from them, and this would be a concrete way to act on that concern.
The Kidman Station is an aggregation of 17 pastoral properties and three supporting properties in breeding, feedlot and cropping. It is spread across Queensland, the Northern Territory and Western Australia and is home to 185,000 cattle. At 101,000 square kilometres, it is larger than Ireland and almost half the size of Victoria.
DomaCom Chief Executive Officer Arthur Naoumidis says its ASIC registered platform provides the “ideal vehicle” to give Mums and Dads the chance to invest in the Kidman estate.
“Crowd-funding hasn’t traditionally been associated with pastoral properties, but that’s no reason why it can’t be done. The platform is structured to cater for the smallest apartments to a deal of the Kidman magnitude. The principle is the same, and people can get on-board the Kidman acquisition for as little as $2500 and receive a proportional share of the income and capital value of the property that will be valued annually.
It is also a good opportunity for superannuation funds, whether they be APRA-regulated or SMSFs, to get a slice of this pastoral empire that offers an indicative rent yield of about 9% a year.”
Burgin says long-term holdings in key quality agricultural and pastoral assets make good commercial sense as part of anyone’s investment portfolio.
“Direct property in a diversified portfolio can assist in providing stable returns with the potential for significant gains in the longer term. Many younger Australians are disengaged with their super, but this is a rare opportunity to have an active interest in Australia’s future.”
The Federal Treasurer, Scott Morrison, has blocked a proposed sale based on a FIRB assessment that suggests it is not in Australia’s best interest to have foreign ownership of the Kidman Station.
Burgin says there are many opportunities for ordinary Australians to invest in agricultural properties with the Kidman Station not the only significant asset on the radar. “We are actively looking at placing significant funds towards further acquisitions.”
He says the economic rewards and future food security are primary motivators to acquire Kidman Station. Last year it generated a net profit of more than $50 million or around 15% return on capital.
The crowd-funding campaign will separate the land from the operating business with the land expected to yield about 9% rent and the operating business expected to yield about 20% annually.
“There is plenty of upside in a growing export market for agricultural produce that should continue to improve if the dollar makes further retreats. The domestic and international appetite for quality Australian produce continues to grow each year,” Burgin says.