THE enthusiastic crowd funding campaign to purchase the Kidman cattle empire may have been quashed by the Gina Rinehart led Australian Outback Beef bid, but that has not stopped the company behind the plan pushing forward with a similar venture.
Through another crowd funding campaign, property investment firm DomaCom has made a solid bid and signed a heads of agreement for Pajingo Station, near Charters Towers in far north Queensland.
Pajingo is a 32,000-hectare property that has been in the Black family since 1898.
It is a single lot, beef grazing property located about 115km south-west of Charters Towers.
The DomaCom prospectus for Pajingo said that "it is run as a beef breeding enterprise with weaners being sent off to other properties to grow, while the basic breeding and replacement herd remains in the property.
"This station has been in the hands of the Black family for over 100 years and during this time, but especially over the last 20 years, major development works have been completed to improve the management of livestock.
"These improvements have been mainly in the form of good fencing, laneways and holding squares; reliable water supplies including an extensive water reticulation system and a good set of yards.
"Subsequently, these improvements have assisted greatly in relieving labour inputs and assisted with better management of the herd and pastures.
"The average carrying capacity for the property is around 4500 head.”
The company said the price estimate for the property was $11 million and the gross indicative yield for investors would be 3.8%.
So far DomaCom has had an excellent response from "mum and dad” investors keen to secure a piece of rural Australia.
DomaCom general manager of sales and marketing Warren Gibson told Rural Weekly that through the process of trying to raise the funds to purchase Kidman, they uncovered a "big appetite” for people to invest in Australian farm land.
"Many of the investors who were involved in the Kidman bid have come on board with Pajingo,” Mr Gibson said.
He said the Black family would maintain 26% ownership of Pajingo and would stay on to run the station.
"That really does make it a very good investment for people and it is a great result for the owners.”
Under the model laid out for the purchase of Pajingo, investors will purchase the remaining 74% of the land and the family will rent that portion back off them and continue to run the business.
"The cost of that rental may move up or down, depending on conditions such as drought,” Mr Gibson said.
"But essentially it is an agreed fixed return for investors that is known in advance and on this occasion the owners will also benefit by getting a cash injection that allows them to move forward.
"It is a win-win in many respects. Many farmers leave properties to the children and what they essentially do is leave them with a big debt with some equity.
"This type of investment structure means that the worry of dealing with big bank loans and debts can be a thing of the past for farmers.
"In many respects we are the perfect part owner,” Mr Gibson said.
"We are never going to be knocking on the door saying that we want to move in.
"And the owners will always potentially have the opportunity to buy back some or all of the land when times are good.”
DomaCom chief executive officer Arthur Naoumidis told investors that the "bookbuild” for Pajingo was filling fast.
As of early last week they had already filled 32% of their requirements to purchase the property.
He said that "a commercial heads of agreement has been signed confirming the base rental of $418,000 per annum or 3.8% gross” for Pajingo.
"We believe that investing in Australian agriculture offers the benefit of a socially responsible investment plus strong long-term growth potential in farmland values across Australia,” Mr Naoumidis said in a statement to prospective investors.
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