Corporate Agriculture Austalia

Assessing Performance

Analysing Likely financial returns

Assessing Performance

Returns on investments in farmland can vary depending on whether the asset is leased or operated, its climatic influences and its geographic location. The following provides a general example of how different farm asset returns may work out:

Lease of purchased land, low rainfall (<325mm per annum)

Estimated fixed yearly return could average 7% of land value investment, within a range of 4-10%.

Lease of purchased land, medium rainfall (325-400mm per annum)

Estimated fixed yearly return could average 5% of land value investment, within a range of 3-7%.

Lease of purchased land, higher rainfall (>400mm per annum)

Estimated fixed yearly return could average 4% of land value investment, within a range of 2-5%.

Operation and management of purchased land, low rainfall

Estimated average yearly return over 7-10 years; around 8-12% of total land value - high variability.

Operation and management of purchased land, medium rainfall

Estimated average yearly return over 7-10 years; around 6-10% of total land value - medium variability.

Operation and management of purchased land, high rainfall

Estimated average yearly return over 7-10 years; around 5-9% of total land value - low variability.

These estimates are intended only to provide a basic outline of the returns possible and are in no way guaranteed.

Capital Growth of Farmland

Agricultural Land Values

In addition to income from farming operations or leasing, Australian farmland properties offer the potential for significant capital growth. Historically, Australian farm property has shown continued increases in value across all cropping regions of Australia. Historical data and forward projections suggest that Australian farmland will show capital appreciation of an estimated 7-12% per annum over any given 10 year period and within any given geographic zone.

Click graph for larger image.