China-Australia relations: Chinese buyers defy Beijing-Canberra blues to say ‘Bonza’ to farmland Down Under
- As of March, returns on investment in this sector had risen 8.46 per cent year on year, according to an index compiled by ANREV
- Chinese demand for imported commodities and refined agricultural products will only grow in the years to come, analyst says
Stable returns and a growing demand for food and other agricultural products in China are likely to spur Chinese investment in Australian farmland, according to analysts.
As of March, returns on investment in this sector had risen 8.46 per cent year on year, with income contributing 5.15 per cent and appreciation returns 3.17 per cent, according to an index compiled by the Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV).
“Farmland as an asset is getting more traction in the past years, and more institutional investors might invest in the sector considering the diversification benefits for their portfolios, as well as the returns,” said Amelie Delaunay, director of research and professional standards at ANREV.
Australia, with one of the world’s largest accumulations of agricultural land, is an attractive target for Chinese investment, given the Asian country’s huge population of 1.4 billion and the role food imports play in ensuring its food security. Chinese investors were the largest foreign owners of this asset class, according to Australian Taxation Office. As of June 2020, 13.8 per cent of Australia’s total agricultural land or 53 million hectares was held by foreign investors, 1.7 per cent more than the previous year. Among these, Chinese investors had the largest holding and accounted for 2.4 per cent or 9.2 million hectares.
Besides farmland, foreign holdings also cover investment in vehicles or funds that buy stakes in agricultural lands.
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