Fractional property investing platform DomaCom finalised its first foray into agricultural assets with a deal that gives its investors a stake in pastoral land among Victoria's Western Districts.
The 150-hectare property, Doyles, is outside Casterton near the South Australian border, and is in the prime beef and sheep region. Prior to entering into a contract to purchase the property, the fund was successful in securing a local operator to be the tenant, who will use the property to run beef cattle.
DomaCom's head of property Jason Bennett said: "The identification of good operators to work with in the leasing of the property was key to the transaction. We are striving to deliver a packaged opportunity to investors to enable them to invest into the rural sector through our platform."
It is expected that investors, predominantly SMSFs, will receive an estimated combined income and capital return of 10% per annum on their investment, based on historic returns.
DomaCom chief officer Arthur Naoumidis says the group is "enormously proud" to sign off on its first agriculture crowdfunding project, which has taken about two months to conclude.
"It's our understanding that this is the first crowdfunding project for agriculture assets anywhere in the world. We knew from the Kidman bid that there was a thirst by 'mum-and-dad' investors to acquire agriculture assets, and we have been looking at other properties for quite some time," he said.
"People are motivated by a desire to keep prime rural land in Australian hands, as well as the opportunity for steady yield and capital gain."
Elders' David Peardon, who handled the sale, said the first successful crowdfunding exercise to allow retail investors to collectively acquire an agriculture asset was an "exciting development" for the industry.
"In the past retail investors have effectively been locked out of buying into rural properties," Peardon said.
"But as DomaCom's bid for Kidman demonstrated, where it received around $80 million worth of pledges from 5500 investors, there is an enormous appetite by retail investors for this type of investment."