DomaCom Finalises its World-First Agriculture Deal

The crowd-funder which made headlines last year has finalised its first foray into agricultural assets with a ground-breaking deal that gives 90 smaller retail investors a stake into a high-performance grazing property in Victoria’s prime Western Districts.

KEY TAKEAWAYS:

• The 150-hectare property, Doyles, just outside Casterton near the South Australian boarder.
• Before entering a contract to purchase the property, the fund was successful in securing a strong local operator to lease the property, to run beef cattle.
• DomaCom managed to raise $80 million in pledges towards a proposed purchase of S. Kidman & Co last year.
• In 2015, it was estimated that worldwide more than US$34 billion was raised this way. Although the concept can also be executed through benefit events or other methods, it is now most often performed via Internet-mediated registries.
• The 150ha Doyles property is divided into 11 paddocks of rolling high country fronting Lower Coleraine Road. The holding enjoys outstanding fertiliser history, has excellent fencing and pastures and includes a good set of yards.

In the case of DomaCom’s purchase of the Doyle’s aggregation near Casterton, it said it expected that investors will receive an estimated combined income and capital return of 10pc per annum on their investment, based on historic returns, which is a significant improvement on bank interest.

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,” he said.

DomaCom chief executive Arthur Naoumidis said the group was enormously proud to sign-off on its first agriculture crowd-funding project, which had taken about two months to bed down.

“It’s our understanding that this is the first crowd-funding project for agriculture assets anywhere in the world,” he said.

“We knew from the Kidman bid that there was a thirst among ‘mum-and-dad’ investors to acquire agriculture assets, and we have been looking at other properties for quite some time.”

“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. We have already more investors on our books looking to invest in this asset class, so we are confident that the Doyles deal will be just the first of many,” Mr Naoumidis said.

Elders’ Hamilton-based property agent David Peardon handled the sale. He said the first successful crowd-funding exercise to allow retail investors to collectively acquire an agriculture asset was an exciting development for the industry.

“I think what DomaCom has done in crowd-funding this property acquisition is fantastic. As a country property agent, I have been waiting for 20 years for someone to do this,” he said.

“Thanks to DomaCom for doing this, they will reap the opportunities and rewards as there are many rural operators who would love to lease back investor-funded properties to build the agricultural sector. Investors won’t get better security.”

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