Population, technology and capital set to drive ag investment

GLOBAL population trends, advances in technology and increasing capital inflows are tipped to drive a significant investment boon in the $3.6 trillion Australian agriculture sector.

In its new report, Agriculture, your next investment move, JLL’s national agribusiness team has identified nine key demand drivers it predicts will anchor a new wave of investment in Australian ag.

They include:

• Growing global population, with an average hectare of farmland that once fed an average of 2.8 people now having to support 5.6.
• Technology in agriculture, driven by the Agriculture 4.0 revolution, which incorporates everything from artificial intelligence and analytics to connected sensors and cloud computing.
• Tsunami of capital, estimating the global value of total capital at $USD176 trillion and noting that allocation towards asset classes other than Equities and Bonds has increased by more than 14% in the last decade, with this ‘other’ category including agriculture real estate assets.

Report author JLL Agribusiness director Bhavin Patel, said myriad factors had whetted investor appetite to diversify and enhance their portfolios, from persistent inflation to stock market volatility.

“As high-net-worth individuals, investment funds, pension funds and sovereign wealth funds look towards stable, inflation-resistant investments, agriculture is emerging as a favoured option,” he said.

The Australian ag sector held significant value, standing at roughly $3.6 trillion, making it the second-largest real estate sector in the country, Mr Patel said.

“With institutional ownership lagging behind commercial real estate, there lies a promising opportunity.”

Mr Patel also noted the lack of scale in many of the alternative real estate sectors outside office, industrial, retail and residential.

“In stark contrast, agriculture is one of the very few alternate sectors that offers institutional investors the scale at which they would find it worthwhile to invest in.”

He said as investors navigated the shifting economic landscape, agriculture stood out as a resilient and promising investment avenue.

“The sector’s growth potential, driven by global population trends, technological advancements and increasing capital inflows, positions it favourably for long-term investment strategies.”

Click here to access the full JLL report.