The Resort Agency

Australian Land Investment Offers, Australia, Australia, Australia

Why Invest in Australia ?

The Resort Agency and their partners had considered many geographical locations across the world as a base for its Agricultural Investment products. The choices ranged from South America to Eastern Europe and from Western Europe to Australasia with each different country having its own set of advantages and disadvantages. One of the key concerns governing the decision, was the security of the product, and it was with this in mind that Australia became the country of choice for this offering –able as it was, to fulfil all of the following criteria :

Advanced, reliable legal system. Australia has an advanced legal system based very closely on English Law. This is of utmost importance when purchasing land in a foreign country as a Client needs to know that he/she is 100% sure to be actually getting true title to the land being purchased. The Client also needs to have confidence that the situation will remain stable and that his/her land is not at risk of being snatched by the governing power.
Political stability. Australia is a modern democracy with a political structure very similar to that of the UK and as such does not carry any of the inherent risks attached to other less politically developed farming countries. These can include potential changes in economic policy, such as export tariffs, and also political instability that could threaten property ownership or transport. Australia is not in a war zone, nor is it under threat of invasion or at risk of a military coup.
Stable currency. Australia benefits from an economy that is both advanced and stable. There are also no foreign exchange controls and the Australian Dollar can be freely traded on World Currency markets. And the types of hyperinflation that can render some currencies (and therefore assets such as land within those countries) virtually worthless is also unknown in Australia.•
Advanced economy and infrastructure. Australia is a technologically advanced modern country with excellent infrastructure. It is well positioned to benefit from technological advances in the Farming industry. Australia also has a modern, efficient transport infrastructure which ensures being able to get supplies such as fertiliser, as well as labour & machinery to site, whilst being able to transport the harvested crops to market.
Advanced, stable market for land. Australia is no newcomer to farming and it does not have millions of acres of rainforest available to clear to create new arable land. For these reasons, amongst others, the market in farmland is well established and the graph below prepared by Farmanco shows that these land values have been rising steadily over the last 40 years.

Economically feasible. Despite meeting all of the above criteria, Australia also provides excellent value for money when purchasing farmland. Labour and transport costs are also low which means that the yields on the land in relation to the purchase price are remarkably high.

Why Invest in Wheat?

The choice of agricultural type investments is growing by the day. Barely a month passes by without someone claiming to have found the next “wonder-crop” which will grow in the middle of the desert, cure cancer, extend life, save the planet, and make returns of 400% per year for investors. In addition, Investors are presented with opportunities to invest in any number bushes, shrubs or trees - all of them offering the promise of wondrous returns.

Why then opt for something as unadventurous as wheat ?

The reasons are twofold :

A.) Geography :

With this kind of investment, the geographical location of the asset being purchased, is key. For reasons already explained, Australia is a safe haven in terms of the asset, and furthermore ideal in terms of climate, soil, scale, costs, productivity, yields, expertise, access etc.., as well as providing a robust and consistent demand for the product.

B.) Security :
Whilst there are certainly other more “exotic” agricultural investments in the market, we have deliberately elected to concentrate on the security of the investment. In so doing, there are several factors to consider when determining this particular aspect of the investment :

1.) Is there a guaranteed, established market for the product ?
If you are producing a staple foodstuff such as wheat, the answer is evidently “Yes”. The current world shortage of staple foods combined with an ever-increasing world population ensures that there will always be demand for wheat. Furthermore, the simple laws of supply and demand suggest that prices will tend to rise over the long term. Whereas many of the new, exotic agricultural investments coming onto the market are based on some kind of “super fruit/berry/nut” etc., with special properties and the promise of spectacular potential returns, there are clear risks associated with these wonder crops, given that they tend to neither have established nor proven markets for the end product – and such is the fickle nature of the ever-changing ‘fad’ food and health industries, that there is ultimately no guarantee that demand will be there in the long term. Other products currently on offer, are built around a model that relies on the establishment of a worldwide regulated Carbon Offset/Credit market. Whilst this may well come to pass at some point in the future, it is our belief that the sheer number of imponderables, that still surround such offerings, make for an unacceptably high level of risk.

2.) Is there an underlying asset securing my investment?
With this Agricultural Investment, the answer is “Yes”. In fact some come with complete Capital Protection. Simply put, the underlying security with these products is the land on which the wheat grows. All of our products involve the Client actually owning the land rather than leasing it. We also only use existing, working farms with a proven track record and a verifiable value based in part on crop yields and therefore providing verifiable metrics to justify the underlying value of the land asset itself.
And should disaster befall (e.g. drought or disease) causing a total crop failure, all that would in fact have been lost, would have been that year’s crop. The land would still be there, as would the demand and the opportunity to try again next year. (Remember too, that shortages also drive prices upwards !) If, on the other hand, an owner had for example, invested in the planting of some kind of ‘super berry’ producing bush that grew in the desert, where 100% of the value of the investment lay in those plants, a similar scenario would simply leave that same investor saddled with a patch of desert of little or no value (and which in many cases, was probably only leased, anyway). It is precisely for these reasons that our Agricultural Investment Product is firmly based around a staple and stable crop, farmed on proven land with a verifiable underlying value.

Invest with Confidence

We appreciate that Clients need to have faith in a product before being able to invest in it. Indeed this should be one of the most important factors in the decision making process. Every possible safeguard has therefore been put in place, in order to ensure peace of mind. This includes simple, practical measures, such as having UK lawyers confirm title to the land and handling all client money, as well as installing more complex measures such as the Capital Protection built in to some of our products.

Security of FundsIn order to provide Clients with complete peace of mind, the services of Hilliers HRW Solicitors LLP have been engaged for settlements.
Under the terms of the Land Purchase Agreement, all monies will be sent directly by the Client to Hilliers HRW in escrow. The Hilliers HRW’s escrow letter then forms part of the Land Purchase Agreement and ensures the Client gains beneficial ownership of the relevant land. And client funds will remain in escrow with the solicitors until such time as the terms of the Land Purchase Agreement have been met.

Ongoing Management

In order to ensure that the investment is looked after in the best possible manner, the Investor is given the option of choosing between three highly qualified farm managers who will then be responsible for the complete management of the Land, thereby ensuring maximised returns. The Investor may furthermore, choose to change managers at any time.

Legal Considerations

Ownership
Each Investor acquires beneficial ownership of an area of land according to the amount s/he contributes. This means that legal title to the land remains with The Resort Agency’s Partners who will hold the land in trust for the Investor. This legal arrangement is equivalent to legal title in terms of the rights of the Investor and is enforceable in both English and Australian law, but at the same time provides the investor with the benefit of flexibility and also carries no legal costs.

Investment process
The Investor, or the Investor’s agent, needs to complete a simple Land Purchase Contract. The Investor then remits a Contribution as the Land Purchase Contract instructs according to the amount of Land desired.

Applicable Law The contracts state that English law governs the contracts, and that the parties agree in the event of any dispute to submit to the English courts. This means that, although the land is situated in Australia, the contracts themselves fall entirely within the governance of the English legal system. In the unlikely event of any dispute arising with third parties regarding the title to the land or matters relating to rights over the land, the dispute would be settled within the Australian law. As this is based on English law, (which to all intents and purposes in matters relating to property, is virtually identical to English law,) Investors can proceed with the same degree of confidence that they would if they were purchasing land in England.