24 Apr 2013
With the environment in the South African farming sector constantly changing, many commercial farm investors are looking to diversify into different regions and away from core farming activities.
This is according to Wayne Rubidge, manager of the Karoo region of Pam Golding Properties, who says that urban professionals want to enter the farming sector because they see a farm as a sustainable or profitable investment with appealing lifestyle attributes.
Rubidge says one of the categories ripe for diversification is quality Karoo livestock farmland. "Besides the key criteria of good location, infrastructure and quality of water, an important consideration is the quality of the natural grazing available on a farm or in an identified area."
It is home to a number of speciality farms and irrigation farms generating a variety of produce, some of which are the highest quality products in genuine free range meat and organic fibres. Game farms are making a comeback after a price rectification period and with investor focus shifting to farms that provide an income, have income potential, or have a suitable business plan.
Rubidge says that since 2010, activity in the marketplace has seen a number of farms sold, as have the rare top farms that have come onto the market. "Buyers are prepared to pay a sizeable premium for one of the Karoo’s top farms as opposed to a high price for a good farm," he says, with premium farms whether for livestock or game farming in high demand. Buyers are specific in what they would regard as a premium farm in the area.
In regard to cattle farms, he says buyers are looking at well grassed, high rainfall areas such as those found in certain parts of the Eastern Cape and in the north eastern region of the Northern Cape. The carrying capacity should be below 1:12 large stock unit (LSU) or hectares, and have the basic improvements, including watering points, handling facilities, roads and internal fencing. Similarly a sheep farm should have a mix of grass and bush and be priced around or below R7 500 per small stock unit (SSU). If the property has registered irrigation water from boreholes, dams or an irrigation scheme, it would add to the premium as well as quality of infrastructure and improvements.
Then there is the normal and highly desirable mixed farm which has a bit of everything and includes a good location, water, relatively easy access, a farmstead and farmyard, and various other aspects such as scenery and topography, and game.
On the market is a 2 084 hectare cattle farm in Cradock in the Eastern Karoo (Midlands), which offers potential for offering a farm stay opportunity. It has high rainfall, abundant water and vegetation dominated by sweet grasses. The property has gravity fed irrigation to about 25ha of lucerne and two homesteads with mountain views on four sides of the main house and a valley on three sides of the house. The property also has pure water from a fountain and a feeling of remoteness, while being easily accessible. There is a variety of indigenous wildlife and a variety of birdlife.
Activities include walks through changing terrain, mountain biking, horse riding, and fishing from two large dams.
The home has a central conference room with a fireplace, a quiet work area and a study, each with a fireplace. Four solid outbuildings could be converted to bedrooms, making a possible total of 12 bedrooms together with those in the house. The farmhouse currently occupied by the owner could be a residence for a manager.
Another property on offer is a 6 163 hectare sheep farm located east of Richmond in the Northern Cape, with registered water rights and 50 hectares of irrigation as well as a strong fountain and a river running through the property. Well developed with watering points, infrastructure and a sandstone house, the property has a guide price of R25 million.
In the Prince Albert farming district in the Western Cape is a large block of sheep farming land three hours from Cape Town. The two adjacent farms are farmed as one unit and comprise 16 521ha in extent, priced at R24.5 million. The farm is fully developed for sheep and plains game farming with watering points and internal fences. Game includes springbok, gemsbok, kudu, red hartebeest, klipspringer, duiker and smaller animals and the setting is scenic, with a backdrop of the Swartberg Mountains.
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