Aussie farmers hit multi-billion dollar paydirt as land values soar

Australian farmers are reaping the rewards as land values hit record levels due to a rush on rural properties.

Australian farmers have hit a multi-billion dollar paydirt with a rush on rural properties sending land values soaring to record levels.

A combination of low interest rates, improved seasonal conditions across much of the nation and strong returns for farm produce is said to be behind the unprecedented surge, which experts have described as “mind-blowing”.

Some properties have more than doubled in value in the past three years.

“The market is red hot,” said Danny Thomas, senior director of specialist rural property agency LAWD.

“Every sale is a new threshold level of value. It’s bigger than the MIS (managed investment scheme) rush of the 1990s and early 2000s and moreover it’s being driven by fundamentals, not a contrived investment scheme.”

Rob Stein, manager of Tubbo Station at Darlington Point in NSW, which is up for sale with a guide of $40 million-plus. Picture: Michael Frogley

In one of the biggest agriculture deals in Australia’s industry, PSP Investments – the pension fund for Canada’s public service including the world-famous Royal Canadian Mounted Police – last week paid a whopping $500 million-plus for the Auscott Limited cotton farming and processing business in NSW to add to its rapidly expanding local portfolio of land and water assets now valued at well over $4 billion.

The landmark sale came as Canberra Airport owner Terry Snow backed a plan to raise $1.5 billion to spend on purchasing Australian cattle properties.

And Macquarie Infrastructure and Real Assets inched closer to its $348.1 million proposed takeover of ASX-listed Vitalharvest, which owns berry farms in NSW and Tasmania and citrus properties in South Australia.

Four major farm sales this year have topped the magical $100 million mark.

“Agriculture is a huge space to be in at the moment,” National Farmers’ Federation vice president David Jochinke said.

“Covid showed it to be one of the strongest industries globally … and a lot of farming businesses that have survived the drought have come out quite resilient with excellent business models in place. These are in strong demand.”

A syndicate including AFL boss Gillon McLachlan paid $104 million for the iconic 1.25 million-hectare Wave Hill and Cattle Creek stations in the Northern Territory. Picture: Getty Images)

Four major farm sales this year have topped the magical $100 million mark. In January, a syndicate including AFL boss Gillon McLachlan paid $104 million for the iconic 1.25 million-hectare Wave Hill and Cattle Creek stations in the Northern Territory while the Duddy family from Queensland sold its irrigated cropping farm at Goondiwindi for a nine-figure sum. This month descendants of Sir Robert Menzies’ former private secretary, Sir Cecil Looker, sold the 434-hectare Merri Park property just north of Melbourne for more than $100 million.

Strong demand and record prices have also flushed out several high-profile listings, headlined by Macquarie Group’s Lawson Grains business – comprising 105,000 hectares of cropping land in NSW and Western Australia – which is on the market for $600 million. Billionaire mining magnate Gina Rinehart is expecting $300 million for seven cattle stations covering 1.9 million hectares in the Northern Territory and Western Australia.

Mining billionaire Gina Rinehart is selling seven cattle stations and a feedlot – covering almost 1.9 million hectares – in the Northern Territory and Western Australia. Picture: Kai Godeck

CBRE Agribusiness managing director David Goodfellow said some farming country had increased in value by as much as 50 per cent annually during the past three years.

He said values in parts of the Mallee region of northwest Victoria had more than tripled from $1950 a hectare to $6500 a hectare during that three-year period.

“(The market) is exceeding expectations … we probably underestimated the amount of capital that is available to both local and foreign farmers, and low interest rates is what really is driving that,” Mr Goodfellow said.

Mr Thomas said the rural property market was showing no signs of slowing. “Unless there’s some sort of black swan event, we are going to continue to see records broken through the rest of 2021,” he said.

LAND DEALS OF 2021

SOLD

$500 MILLION-PLUS: JG Boswell Company sold its NSW-based Auscott Limited vertically integrated cotton farming, processing and marketing business to Australian Food and Fibre, backed by Canada’s PSP Investments – the pension for the Royal Canadian Mounted Police.

$104 MILLION: Western Grazing sold its 1.25 million hectare Wave Hill and Cattle Creek stations in the Northern Territory to a syndicate including Jumbuck Pastoral Company and AFL boss Gillon McLachlan.

$100 MILLION-PLUS: The descendants of Sir Robert Menzies’ former private secretary Sir Cecil Looker sold the 434-hectare Merri Park property at Beveridge in Victoria to the Melbourne-based SIG Group.

$100 MILLION: The Duddy family from Goondiwindi in Queensland sold its South Calandoon irrigated property to an unknown buyer.

PENDING

$348.1 MILLION: Macquarie Infrastructure and Real Asset’s proposed takeover of the ASX-listed Vitalharvest, which owns berry farms in NSW and Tasmania and citrus properties in South Australia.

FOR SALE

$600 MILLION: Macquarie Agriculture – Australia’s second-biggest farmland investor – selling its Lawson Grains business comprising 105,000 hectares of cropping land in NSW and Western Australia.

$300 MILLION: Mining billionaire Gina Rinehart is selling seven cattle stations and a feedlot – covering almost 1.9 million hectares – in the Northern Territory and Western Australia.

$150 MILLION: The Menegazzo family of Stanbroke Pastoral Company is selling its 438,000-hectare Miranda Downs Station in Queensland’s Gulf of Carpentaria region.

$70 MILLION: Duxton Asset Management is selling its Ace Dairy business in Victoria’s Gippsland region, which runs more than 4000 cows over 2040 hectares.

$60 MILLION-PLUS: Melbourne-based investment company Tiverton Agriculture is offloading its 10,619-hectare Picardy Station at Dysart, near Emerald, in Queensland.

$40 MILLION-PLUS: The UK billionaire Pritchard-Gordon family selling the historic 14,876-hectare Tubbo Station near Narrandera in NSW.

$35 MILLION: Former Australian Agricultural Company chairman Nick Burton-Taylor is selling his 210,000-hectare Bellevue and Nychum stations northwest of Cairns in Queensland.

$30 MILLION: The Craig family from Adelaide selling its 2500-hectare Tuloona property at Harrow, in Victoria’s Western District, after 40 years of ownership.

$30 MILLION: The Schembri family selling its 584-hectare Greenview Farms almond orchard at Tabbita, near Griffith, in NSW.

Originally published as Aussie farmers hit multi-billion dollar paydirt as land values soar