Concluding the deal
Aucor Property gives farmers best chance of a sale
Aucor Property has a stellar track record in the commercial property auction space and have identified a gap in their business to continue their upward trajectory in sales with the launch of a dedicated Agricultural arm. The sole focus in this division will be the disposal of farms. The company recognises that South Africa’s agricultural landscape is an extremely specialised area that requires an extraordinary depth of knowledge of both land values and the business of farming to ensure the successful sales.
Francois Pawson has come onboard as Business Development Manager of the agricultural business unit. Pawson joins with 20 years’ experience across the agricultural industry. He started his career as a farmer and having found success in a tough industry, he established himself as a management consultant, working with farmers who were struggling to navigate challenging economic and operational environments. Understanding the challenges farmers faced in selling farms he moved into the real estate sector to aid them with the sale of their businesses. Pawson therefore brings a holistic understanding of the sector to Aucor Property.
Pawson describes how our farming industry is more diverse than any other country in the Sub-Saharan region. Our unique climate varies from dry and arid in the Karoo, to Mediterranean in the west and sub-tropical on the east coast. We experience winter rain in the Western and Eastern Cape and summer rainfalls inland, meaning we have the opportunity to yield all major grains, oilseeds, deciduous and tropical fruits, sugar, citrus, nuts, wine, flowers and most vegetables.
Farming and the real estate sector for 2024
Pawson estimates that there are roughly 32 000 farmers contributing to the economy, varying from commercial to subsistence farming. According to Agri SA, the current average age of a farmer in South Africa is sixty-two. This is alarming for the future as there is a low succession rate to continue previous family farming legacies.
The number of farm units sold in South Africa remained stable at roughly 4200 in 2023 compared to around 3900 farm units sold in 2022. This stability can be attributed to increased demand for farms bigger than 600ha due to the impact of good summer rains on production, according to Johann Bornman, chairperson of Agri Development Solutions. The weakening Rand has been positive for exports but is also dependent on the national harbours providing an adequate logistics solution. Finally, a huge positive is the new entrants to the Agri sector due to some successful skills development programs.
Benefit of auction for the agri sector
The greatest benefit to sellers is that they are able to dispose of their farms via auction in 6-8 weeks. Having a set date for auction also creates a sense of urgency for serious buyers. Over and above this, Aucor Property implement aggressive marketing campaigns and rely on a database of over 45 000 subscribers to bring buyers to the auction. Conclusion of deals are more likely as the conditions of auction eliminate back and forth negotiations that could result in no deal as is often the case with traditional real estate listings.
For the buyers, the value of the entity will be thoroughly assessed before being placed on auction. This provides clarity, with full disclosure being given regarding factors like water rights, land claims and labour force. A level of certainty also comes into play as it becomes clear to the buyer that the seller is serious and not simply “testing the market”.
Contact Francois at francois@aucor.com to get a full understanding of the auction process and to discuss the sale of your farm.