Weekly Property Review: Increasing competition in the property marketing space

Property editor Linda Rowley, 19/10/2016
Cattle on Western Grazing's Tanbar Station in the Channel country after flooding. Accountants Bentleys sold the property last year on behalf of Western Grazing to Paraway Pastoral Co.

Cattle on Tanbar Station in Queensland’s channel country after flooding. Accountants Bentleys sold the property last year on behalf of Western Grazing as part of a deal worth +$130 million to Paraway Pastoral Co.


IN A space traditionally occupied by pastoral houses and specialist property marketers, a new trend is emerging for investment advisors, accountants and legal companies to move into marketing of rural property.

Gabriel Passmore is an agribusiness consultant with Sydney-based advisory firm Chapman Eastway – a long established advisor to the Australian agricultural sector – with a particular focus on farming and livestock grazing businesses.

Mr Passmore said he had seen an increasing number of advisors, lawyers and accountants selling, or attempting to sell, more complex agricultural property assets. The trend was particularly evident in the cattle property segment of the market.

Recent examples include:

Bentleys – an international network of business advisors and professionals that provides accounting services, audit and assurance, business advisory, cloud solutions, corporate recovery, financial planning, superannuation advice, trusts and estates planning, and taxation consulting.

Ernst & Young – a multinational professional services firm headquartered in London, with offices in every capital city of Australia except Darwin.

  • Ernst & Young is the marketing agent for S. Kidman and Co – the largest private landholding in the world comprising 10 working cattle stations spanning 11 million hectares.

Several large legal firms have also got in on the action, negotiating a number of large grazing property transactions for clients in the past two years.

Mr Passmore believes there are a number of reasons why the trend is occurring:

  • Advisors, accountants and lawyers often already have an intimate knowledge of an existing client’s business and assets. As a result, a vendor may be more comfortable selling through them, rather than a specialist real estate agent.
  • With more complex assets, there is a degree of financial literacy and business acumen that advisors, accountants and lawyers are able to offer investors, which they would argue is beyond a traditional property agency. For example, a sophisticated investor without in-depth agricultural knowledge can look at the financial metrics they are accustomed to, based on the numbers the vendor’s agents have devised, and have a good level of confidence around potential returns for the asset.
  • Advisors and accountants often have an operational insight of asset both practically and financially. They can therefore put together exceptionally comprehensive information memorandum packages.
  • Tax optimisation – Advisors can structure the transaction by understanding the affairs of both parties to achieve a better after tax outcome. For instance, where the vendor has tax losses the purchaser may want to dissect part of the purchase price towards depreciable plant.

The move into the marketing of properties appears to be blurring the lines between the functions of advisors, accountants and legal companies.

Mr Passmore believes conflict of interest is a distinct risk, in separating advisory and property marketing functions, for example.

“Real estate agencies are trying to push up into the advisor’s space, and the advisors are trying to push down into the agent’s space, so the functions are becoming blurred. But it is beneficial for a vendor to have so many options to market their property. Everyone has their different strengths and weaknesses,” he said.

He said in the end, it will come down to what a vendor thinks is the best option.

“Which is why, in some cases, they will go with a firm they’ve already dealt with, because they have a more intimate knowledge of what the end goal is for the vendor.”

Mr Passmore believes investment advisors, accountants and legal companies are attracted to large property transactions for two reasons:

  • These companies argue that they have the vendor’s best interests at heart. They believe their confident and comprehensive approach secures their clients the best result.
  • A commercial outcome, in what are often very substantial monetary transactions. The three aggregations listed above, for example, represent an asset value of well over $600 million.

Such moves are making the rural property marketing space even more crowded than what it currently is.

Mr Passmore said the number of real estate agents selling agricultural assets has also increased dramatically.

“A decade or so ago, there were really only two main players – Landmark and Elders. Today, there are many more niche marketers selling agricultural assets trying to secure market share. For instance, seven years ago CBRE and Colliers didn’t sell agricultural assets in Australia. Now they are, and are taking significant market share from conventional property agency.”

Mr Passmore believes the real estate marketing industry is becoming more competitive, as a result.

“Agents are becoming more competitive with their fee structures and value proposition. However, agents have fixed costs – in terms of their office space and staff – that need to be met. So they can’t drop their price too low to the point where they are just breaking even.”

He said there may be a number of attractions for the vendor in choosing to market through a lawyer, accountant or advisor.

  • Someone who already knows their asset intimately, particularly in terms of the financials, can add a degree of comfort to their selling.
  • A better price because an accountant, lawyer or advisor may know their asset so intimately, that they are able to structure an information memorandum or a package that gives buyers the comfort to extract their highest willingness to pay.

Mr Passmore believes the trend will continue, but whether these new players in the property space will capture more market share remains to be seen.




Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


  1. Rawdon Briggs, 21/10/2016

    Some interesting points are raised here Beef Central.
    As an agent acting for all levels of the market we see and hear a lot of different feedback. Four major decision drivers exist in the vendor market today.
    1- Total Asset Price or Realization Expectations
    2- Time spent seeking the above total price
    3-Upfront & Success Based Fee’s
    4-Depth & experience of the team to complete the sale process

    Tier 1 Global real estate services firms & Corporate finance firms bring different and sometime complimentary skill sets to Australian Agribusiness vendors with different strengths applied to the 4 key decision drivers above.

    Regards, Rawdon Briggs

    Thanks for your comment, Rawdon. Our weekly property reviews are designed not only to report on property outcomes, but to stimulate discussion like this over trends and opportunities. As always, we welcome reader feedback – and few topics polarise opinion as much as property. Editor

  2. Chris Morgan, 20/10/2016

    This issue should not be an either or decision because any agent handling this scale of property would in the first instance include the vendor’s professional advisors prior to marketing the property. Conversely the agent will assist any purchaser with their due diligence.
    Experience has shown me that many of these shiny suits can add and subtract but couldn’t negotiate their way out of a paper bag!
    That’s why they go to tender to save having to put a price on anything.
    All they are doing is pumping their fees by the equivalent of the agent’s commission. I haven’t seen to many Armani suits loading or drafting cattle lately.
    Each party has a part to play, let’s respect each other’s role.

    Thank you for your comment Chris. We’d like to point out that this report was in no way intended to reflect negatively on the role or skills offered by conventional property agents – but simply to flag an emerging trend, and the desirable attributes that some vendors of very large assets appear to see in accountants, solicitors and others involved in ‘non-traditional’ marketing of rural property. We believe that stakeholders already clearly understand the valuable skills-set that any good property agent possesses. Nevertheless, we will discuss this point further in an upcoming weekly column looking at trends in agency commissions and fee structures, in a rapidly changing property market. Editor.

  3. Mark Cook, 20/10/2016

    Great to see increased competition in this space, and whilst not new (as pointed out), its good to see some momentum being generated for this approach.

    Agricultural businesses, the majority of which have long been valued on their assets alone, are no different to commercial entities across any other sector. As pointed out above these are significant businesses and as such valuations should be based on a combination of historic and forward looking cash-flows. A cash-flow based valuation methodology provides transparency to the sale process and does not rely on the purely productive metrics utilized for the vast majority of rural asset sales.

    Well done to all in driving this approach which will result and positive outcomes for both property vendor and purchaser.

  4. Michael J. Vail, 19/10/2016

    Interesting point.
    Regarding Accountants entering this space: Corporate Finance divisions of accounting firms have long been involved in this space; in fact I was personally involved in 1996 when Peter Sherwin was selling property in NT, and touting it to foreign investors.
    Property is merely another class of investment; in fact one of the three main pillars of, Bonds/Fixed Income instruments, Stocks and Shares, and Property.
    Investment in Property is not the domain of Real Estate Agents alone; not governed by Advice Legislation.
    In fact I take great comfort from this fact; especially in the Agricultural space.
    Commission Paid by Vendors to Agents of greater than 3.0% plus GST, of sale price is arguably obscene. No wonder the two named international real estate firms are so keenly interested. Maybe a suitable agreed fixed fee is more appropriate, as in other advisory spaces.

    Thanks for your comment, Michael. We might scrutinise issues surrounding agency commissions on cattle property sales in an upcoming column. That space appears to be a lot more ‘dynamic’ now, than what it used to be. Editor

Get Property news headlines emailed to you -