‘Huge’ appetite for agricultural assets, says DomaCom

Arthur Naoumidis, chief executive officer of DomaCom, said the Parliament should make “every effort” to encourage this investment.

“Although the value of agricultural land fluctuates in line with the highs and lows of climatic changes, such as drought, it attracts reasonable yields and enjoys capital gain,” he said.

“In our opinion, domestic investment into agricultural assets has the potential to be a significant game changer in the rural sector as the replacement of debt with long-term investment equity not only provides stability to rural enterprises but can substantially reduce the debt servicing load for the operating business.

“This has many benefits, including more robust business structures by reducing debt servicing, the ability to reinvest by the operator into operating assets such as cattle, feed expansion, equipment for improvement, thus enhancing the outcome of greater revenue to increase equity or for further expansion.

“Business is increasingly looking to rural land, just as foreign interests are, and we should be encouraging our $2.1 trillion superannuation industry, including the SMSF sector, to increase their exposure to a 2.5 per cent asset allocation from the current 0.3 per cent.”