How Agricultural Property Can Go Toe-to-Toe with Equities

Why It Matters

For investors, protected-cropping property offers a way to gain inflation-resistant, diversified exposure to essential food-supply infrastructure with predictable income through long leases, while technology helps mitigate climate-driven production risks. Confidence: 85

Summary

Centuria’s Kelvin Mchuan says the firm is building an agriculture strategy focused on protected cropping—primarily glasshouses—aimed at delivering domestic food security while avoiding operational farming risk by using long-term leases with specialist operators. Since mid-2022 Centuria has amassed about A$650 million of protected-cropping assets (roughly 145 hectares under glass), structured with typical lease terms around 20 years. The portfolio targets high-yield, technology-driven production that uses less land, water and fertilizer, positioning the assets as critical infrastructure for supermarket supply chains. Centuria argues these assets have low correlation with equities, act as an inflation hedge and suit investors seeking patient, long-term capital exposure to essential demand.

Original Description

Agriculture plays a crucial, if often unheralded, role in society, but what's the role in can play in an investor portfolio? In this interview, Centuria's Kelvin McKeown explains how its qualities as a diversifier, and its best-in-class status as an inflation hedge make it an asset class worth considering at times of macro uncertainty.

He also explains how technological developments are removing many of the potential shortcomings of the sector, and how careful selection can drive sustainable long-term income.

Time codes

0:13 - How his background in farming helps assess agriculture opportunities today

2:16 - Why agricultural assets are viewed differently through geopolitical uncertainty

3:30 - How the Centuria Agriculture Fund looks to reduce risk and stabilise income

4:51 - The exposure the fund offers and the role it can play in a portfolio

6:15 - How the shift to protected cropping helps in terms of income and risk management

7:37 - How to simplify the complexity of agriculture assets

8:41 - How investors should think about income and total return in the agriculture sector