During the next 18 months rural businesses will be forced to navigate the political uncertainty of the election, the effects of climate change and severe weather patterns, softer commodity markets due to the economic slowdown, ETS complexities, and interest rates nearing the top of the cycle.
Richard O’Sullivan, Director of Rural & Agribusiness at Colliers Christchurch, says with the primary industry being such an integral part of the fabric of New Zealand there is a real need for strong advisory in the rural marketplace due to the increase in regulatory and due diligence demands placed on farmers.
“We’re seeing it more and more – farmers and landowners aren’t necessarily just looking at selling; they’re looking for advice on values, change of land use, preparation, and at differing approaches to potential revenue with forestry and environmental considerations sitting close to the top of the agenda.”
A recently concluded 108ha land sale to two different parties in Mid-Canterbury by the Colliers Rural & Agribusiness team involved a strategically directed subdivision process and land use change project spanning 12 months.
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The final transactional value of a market-leading $55,000 per hectare was only possible due to thorough preparation, strong and regular advisory and communication between all parties, and the use of reputable surveyors and solicitors.
The rural market shows a continued need for expert strategy and knowledge, and the Colliers Rural & Agribusiness team has continued to develop its expert capability.
The opportunity to service the rural community differently and with specialist knowledge was first initiated by the formation of the Colliers Rural & Agribusiness team in 2014 to complement its already dominant commercial business.
“We’re in the business of rural people,” O’Sullivan says. “We have long relationships with most of our clients and these are often not fostered when the going is good, but when the going starts to get tough. That’s where we really add value – to help these people and their businesses to benefit from the hard work they’ve put into the land that they’ve often lived on for generations. It’s a real pleasure to help farmers drive successful commercial outcomes, sometimes in unexpected ways.”
A multi-farm sale in the Canterbury foothills near Oxford was seen as the only way to affect a family succession plan until Colliers advised that the larger property of the three could be scoped for a carbon and timber acquisition focus for the less productive land.
A competitive sales process for the property then resulted in a considerably higher sales price being achieved leading to the families being able to continue individual farming operations on the remaining farms.
The Colliers team’s close ties with the Agribusiness division in Australia has also opened up new global networks, private equity funds, plus thorough due diligence channels, and easy market access for New Zealand clients to operate internationally.
Colliers has resourced all Rural Sales Advisors to be an expert in varying types of rural transactions and well informed across all the key aspects of the rural market and its influences.
The company has close relationships at a national level with NZIPIM, Nuffield and Kellogg Rural Leaders and regionally with New Zealand’s rural trading banks, farm accountancy firms and other key rural advisors (including environmental, surveying, valuation, legal, and carbon forestry), which O’Sullivan says is what sets Colliers apart.
“So yes, it is a tough market, but we are continuously seeing the green shoots of enterprise across all rural sectors, and we are proud to have the service lines and expert advisors in-house to share a voice in how to realise the strategic value of important rural business decisions.
“The market may be challenging but that is when measured and competent advisory is imperative. We are looking forward to the spring season and once again being at the kitchen table to play our part in the strategic direction of the industry.”
- Article supplied by Colliers
