How agricultural property can go toe-to-toe with equities

Please note this interview was filmed on 13 May 2026.

Agriculture is one of the cornerstones of Australian commerce, but as an investment proposition, has a reputation as a higher-risk, lower return segment of the property landscape, or broadly inaccessible to the average investor.

"There's a lot of people that look at agriculture and they either say, 'Well, I don't understand this or I don't understand the risks or the risks seem too big for us'," says Kelvin McKeown, Portfolio Manager of the Centuria Agriculture Fund.

But he believes a range of technological changes, and a disciplined approach to investing in the sector, mean it can offer a raft of potential benefits, including strong income, genuine diversification and returns that match those found elsewhere.

"Historically, if you look at a total return graph of agricultural assets, especially in Australia versus any other indices, be it the stock market or even residential property, you'll see that it goes toe to toe," says McKeown.

Agriculture is also a sector that can perform through times of macro and geopolitical uncertainty, he says, and ongoing trends are reinforcing the opportunity right now.

A rising global middle class that's looking to consume a greater variety of food even as arable land per capita declines means farmland itself is becoming increasingly valuable. 

And that's a trend coming at a time of heightened geopolitical unrest and persistent inflation, historically periods in which agriculture has performed well, says McKeown.  

In fact, analysis by FarmTogether found farmland had a 0.97 to 1.00 correlation to CPI inflation in the US, much higher than gold, equities, bonds and even private real estate. 

Not only does agriculture better fulfil the role of inflation hedge, its low correlation to other asset classes makes it a strong portfolio diversifier.

Analysis by Rural Bank also found Australian farmland values have increased for 12 consecutive years, with an average annual growth rate of 8.5% in the 20 years to 2023. 

How Centuria approach agriculture 

As someone who grew up on a multi-generation sheep farm in southernmost New Zealand, McKeown has been around agriculture his entire life. 

"I always wanted to be a farmer, but I was told in no uncertain terms that I was going to university and doing something else," he says. "And then I found myself at Macquarie Bank and back in the agriculture sector. Somehow it sucks you back in."

Now at Centuria, he's overseeing roughly $640 million in assets as part of the Centuria Agriculture Fund, which looks to provide steady income and returns while minimising many of the risks associated with the industry. The first of those is in its approach to operations. 

"We've found that the best way for us to do that is to find experienced operators who understand that risk and want to take on that risk. And then for our investors just to be passed back the rental income from the lease, but still have exposure to the overall agriculture investment."

How tech is reducing risk

As someone who grew up around farming, McKeown is very cognisant of the challenges facing the sector, especially in a country like Australia. 

"Australia is a country of extremes," he says.

"You've got your droughts, your frosts, your fires, your pests and diseases, and you think, 'that's just too much, who would be a farmer?' And we understand that, and we get that, but we still want to be able to provide investors exposure to the asset class."

One of the key breakthroughs in combating the risks presented by weather and climate is the development of what's known in the industry as protected cropping - produce grown in closely-managed glasshouses.

"Over the last four years, we've built up a portfolio of $650m or so of protected cropping assets, or glasshouses," says McKeown. "That's around 145 hectares under glass. It probably doesn't mean a lot to people, but to put it in perspective, that's around 70 Melbourne Cricket Grounds of produce growing under glass."

These farms play a crucial role in ensuring the continual supply of produce to the country, says McKeown. 

"The way we view these assets is that it's the critical infrastructure for the supply of fresh fruit and food into Australia," he says. 

"Put very simply, the typical glass house is around 20 hectares. That's probably producing somewhere around 15,000 tonnes of tomatoes. If one of them was to go offline for some reason, then you'd notice it on your supermarket shelf, you'd notice it in the price of tomatoes."

It's all part of Centuria's strategy in reducing risks where possible to provide investors with reliable returns and growth.

"If you can reduce risk in your agricultural operation, then that makes it a lot less risky for the tenant and the rental income that's coming back to the investor."

A long-term investment

Given the crucial role agriculture plays in society, it's important that those investing in the sector, like Centuria, understand the long-term thinking the industry demands.