Investors offered rural opportunities

Thursday 18 October 2012

There are more options opening up for investors wanting a slice of the rural sector, according to Bayleys real estate.

By The Landlord

The agency has listed several farm shareholding opportunities over recent months.

Spokesman Scott Cordes said proportional ownership was becoming more common in the rural sector.

“Otherwise known as syndication in the commercial and industrial sector – where a syndicator sells down a set number of titles into, in the case of the rural sector, a farm. There may be 150 titles being sold by the syndicator in, for example, $75,000 portions.”

He said in other situations, farmers were selling off slicesof their farms while holding on to other bits – for example, selling off coastal land which had increased in value.

“The ‘vendors’ aren’t so much selling the farm real estate as such, but are selling a shareholding in the farming business conducted on the farm.”

Bayleys currently has listed for sale 25% of Whitestone Pastures, west of Oamaru.

A quarter of the 844 hectare dairying unit is valued at $7 million, which will repay an existing shareholder.

Bayleys Canterbury salesperson Ruth Hodges said: “The only stipulation is that a minimum of 25% is introduced, which can be from either a group of interested investors or from one sole investor. In addition, if there were investors who were interested in more than 25% then this could also be accommodated.”

A business plan for the Whitestone farm forecasts productivity and output to increase over the short to medium term as management efficiencies are implemented, combined with ongoing improvements in animal genetics and pasture renewal. The farm has 1,116,192 Fonterra shares – with each share currently valued at $4.52.

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