Estimated reading time: 4 minutes
Aucor Property has a stellar track record in the commercial property auction space. The property giant has identified an opportunity in its business model to continue its upward trajectory in sales with the launch of a dedicated agricultural arm of which the sole focus will be the disposal of farms.
The company recognises that South Africaâs 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 sale of farms.
Consequently, Francois Pawson has been brought on board to take on the role of business development manager of the agricultural business unit. He joins with 20 yearsâ experience in the agricultural industry.
He started his career as a producer and having found success in a tough industry, he established himself as a management consultant, working with producers who were struggling to navigate an often-challenging economic and operational environment.
Since he understands the challenges producers face in selling farms, he moved into the real estate sector to aid producers in the sale of their businesses. Pawson’s extensive knowledge of the industry allows him to bring a holistic understanding of the sector to his role within Aucor Property.
Pawson describes how the South African agricultural sector is more diverse than any other country in the Sub-Saharan region. The country’s unique climate varies from dry and arid in the Karoo, to Mediterranean in the west and sub-tropical on the east coast.
Winter rain occurs in the Western and Eastern Cape and summer rain falls inland, meaning the country has the potential to produce all major grains, oilseeds, deciduous and tropical fruits, sugar, citrus, nuts, wine, flowers and most vegetables.
Farming and the real estate sector in 2024
Pawson estimates that there are roughly 32 000 producers contributing to the economy, varying from commercial to subsistence farming. Agri SA reports that the average South African producer is 62 years old, which poses a serious threat to the future of agriculture since few family farms are being passed on to the next generation.
The number of farm units sold in South Africa remained stable at roughly 4 200 in 2023 compared to around 3 900 farm units sold in 2022. Good summer rainfall boosted production and raised the demand for farms over 600ha, which stabilised the market, said Johann Bornman, head of Agri Development Solutions. The weakening rand has been positive for exports.
However, it also depends on the national ports providing an adequate logistical solution. Finally, a huge positive is the new entrants to the agricultural sector due to some successful skills development programmes.
Benefit of auction for the agricultural sector
The greatest benefit to sellers in the agricultural sector is that they can dispose of their farms within six to eight weeks. Having a set date for an auction also creates a sense of urgency for serious buyers.
Over and above, Aucor Property implements aggressive marketing campaigns and rely on a database of over 45 000 subscribers to bring buyers to the auction.
The conclusion of deals is more likely because the conditions of an auction eliminate back and forth negotiations that could result in a “no deal” as with traditional real estate listings.
For the buyers, the value of the entity will have been thoroughly assessed before being placed on auction. This provides clarity, with full disclosure being given regarding factors such as 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 âtesting the marketâ.
Contact Pawson at francois@aucor.com to get a full understanding of the auction process and to discuss the sale of your farm.
