Iconic farms in South Africa compete with those in rest of Africa

Good quality farm land in South Africa remains a sound investment and while commanding a premium price, it is still competitively priced when compared with such properties elsewhere in Africa, says Wayne Rubidge, Pam Golding Properties’ area manager for the Karoo.

“Underpinned by the fact that the country has substantial infrastructure, support services and expertise, buying a good quality farm in South Africa has the potential for a good investment. As a result, investors are generally prepared to pay a premium for a quality farm - and the better the agricultural or ranching potential, the higher the premium.”

He says when determining what should be paid for a top farm investors consider a variety of factors, such as water security, soils, quality of infrastructure and location. These top farms often include additional prestigious components such as clientele in regard to a game farm, for example, or historic aspects such as Western Cape wine and fruit farms, Eastern Cape livestock farms or trophy Karoo farms. Most of such iconic type farms seldom make it to the open market as sellers usually prefer more discreet ways of selling these sought after properties.

Says Rubidge: “In South Africa the terms ‘agricultural property’ or ‘farm land’ could mean a wide range of property types and land usage. Often the term ‘agriculture ‘is interpreted as relating to a property that involves planting crops - and for purpose of clarity we refer to it as such. Most other categories of farm properties are for the raising or management of animals and these include livestock farms, game farms, dairy farms, etc. Basically these comprise two types, namely intensive livestock or breeding farms and extensive farms. The word ‘farm’ then is a generic term for all types of farming land whether this is range land, game farm, potato farm or a lifestyle farm. A lifestyle farm is still a farm even though the land use related to enjoying the aesthetics and scenic aspect of the property and surrounds, and this is often coupled with a tourism component.”

He says many South Africans have some sort of farming experience, skills or farming background and have shown to be some of the most resourceful - as evidenced by the demand for South African farmers from other African countries. “In many of these more favourable farming countries land was cheap compared to South Africa, but recently there has been a surge of investment into African farming land by many multinational companies and countries. The driving force behind this is about food production and food security. The result has been that land prices have risen substantially in many favoured countries, putting them on par with South African prices. An example of this is the continent’s largest flood plain in Sudan, where Nile irrigation ground is selling for the same price per hectare as that being paid in South Africa’s irrigation schemes, which is in excess of R80 000 per hectare. This price escalates up to R250 000 per hectare if planted with citrus, for example,” says Rubidge.

Currently Pam Golding Properties is marketing a magnificent, private Eastern Cape game farm that has been in the same family and well maintained for the past 150 years. The property has an impressive homestead set in mature, landscaped surroundings with abundant water. At R7000 per hectare this 3000ha gem of a game farm offers the investor a special property. Also in the Eastern Cape is a highly profitable export citrus farm in full production with a variety of fruits. This well known property is on the market for R21 million. Available for acquisition and situated in the Karoo is a historic property of over 8000ha. Located in one of the best mixed farming areas of the Karoo, the farm also lends itself to the breeding of rare game and has an appealing historic farmstead area.

Says Rubidge: “In the Western Cape there is growing interest in the established wine farms that come onto the market from time to time.  Like the other farms mentioned these offer something very special and different, and are limited in availability. In the Northern Cape are some exceptional game and livestock ranching spreads. Due to their size they attract a special type of buyer who drawn by the vast open spaces. Examples of what is currently available is a 13 000ha Kalahari game farm for US$10 million or a 20 000ha sheep farming property for R40 million.”
Besides these rare and prestigious farms there are speciality farms that are available from time to time.  These more boutique-like farming operations are equally profitable and an example is an impressive olive farm complete with new processing equipment and supply contracts. Being one of the most prestigious olive brands on the South African market, at a price of R35 million the buyer still has huge undeveloped potential and sound returns in both capital growth and income - particularly due to possibility of restrictions being imposed on cheaper imports.

Adds Rubidge: “Another example of a ‘limited edition’ is a 1000ha oceanfront cattle or game farm with over five kilometres of coastline. Currently a cattle farm, the property has a very high carrying capacity and great potential  to be converted to a game farm and is priced at R50 million. All these above properties have become available for specific reasons, not because of the property itself.

“For the South African and international investor who is considering buying a farm in South Africa there is an abundance of options due to the diversity of farming opportunities. A sustainable farm can start for as little as R1.5 million, which with little effort can carry all its costs while allowing the owner to enjoy a rural lifestyle. A popular price range for South Africans investing in farms is between R8 million and R12 million, however there is increasing appetite to increase this investment as land is still considered an excellent option,” says Rubidge.

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