June 16, 2015

The new Australian investment firm, DomaCom, has established an agricultural investment arm within its portfolio. The move is designed to attract investments from self-managed superannuation funds (SMSFs).

“Financial advisers and planners are reading the same articles we are in the agricultural sector about the potential for rates of return in agriculture above those in other property sectors, so this gives them a chance to participate in that growth,”explains agricultural property consultant, Peter Walch.

The structure is also geared to provide an advantage for farmers who are looking to scale up and expand operations. The addition of such investors will allow farmers longer term leases over the typical three year agreement, and will give them the capital needed to expand.

Investors with DomaCom will be required to invest a minimum $20,000, which can be divided into separate investment lots of as small as $2,000 each, dedicated to different properties. Once enough investor interest is generated for a particular property, DomaCom will move forward to acquire it, establishing a sub-fund consisting of the property’s investor base. Each property is assessed and valued annually, and is ring-fenced from DomaCom, to be held by a custodian on trust for the fund. Properties will generally be held for a minimum five years, however, if an investor wishes they can exit the fund earlier by selling to another DomaCom investor.

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