Gina Rinehart, Lawson Grains, Appleton Cattle Company: Aussie farm sales outlook

Rising interest rates, softening commodity prices, and a tight supply of farms for sale are factors which will come into play this spring selling season.

The white-hot frenzy of demand for Australia’s premier rural property has calmed, as the “perfect storm” of buying conditions drifts out to sea. But a limited offering of high calibre farms for sale has ensured values have remained at near record prices.

A cocktail of rising interest rates, softening commodity prices and an unfavourable seasonal outlook for much of the nation has caused the buyer pool for Australian farmland to shrink from the dizzying highs of the rural property boom in recent years.

Rural Bank head of agribusiness development Andrew Smith said the desire from some buyers for Australian farmland had decreased this year.

“Buyer confidence has turned under the effects of increased interest rates, the decline in commodity prices, particularly for sheep, cattle and wool so far in 2023, coupled with the prospect of a drier second half of the year, is creating an outlook for reduced farm incomes – of which a greater proportion is being consumed by interest payments,” Mr Smith said.

“Reduced buyer appetite is still being met with tight supply of farmland listings. There is little pressure to sell at present off the back of three consecutive years of above average rainfall and high commodity prices.

“There are instances of properties selling for below expected prices, albeit still at high levels.”

Herron Todd White director Angus Ross warned there could be a “correction” in rural property values if there are further drops in commodity prices and increases in interest rates.

“A tipping point may come whereby further interest rate rises will outweigh capital growth and potentially result in a market correction,” Mr Ross said in Herron Todd White’s monthly property market update.

“A strong indicator as to future rural grazing property values is commodity prices for sheep and beef which have softened significantly in recent times. A continued softer commodity price may result in a slight correction in property values, however we are yet to witness this.”

The most notable rural property deals so far this year have predominantly involved institutional and high net worth buyers, along with some major farming families.

Hancock Agriculture executive chairman Gina Rinehart. Picture: Supplied

Australia’s richest person, Gina Rinehart, significantly restructured her agricultural portfolio earlier this year, selling four S. Kidman and Co cattle stations in Queensland and the Northern Territory.

The Appleton Cattle Company purchased Durrie, Naryilco and Glengyle stations, which span a combined 1.96 million hectares at Bedourie in outback southwest Queensland, while the Harris family purchased the 457,000ha Brunchilly Station, located north of Alice Springs, for more than $100 million.

As part of the restructure Ms Rinehart’s Hancock Agriculture also paid about $80 million for two of Packhorse Pastoral’s cattle stations, while Packhorse sold their third station to the Queensland Investment Corporation for more than $30 million.

Packhorse Pastoral Company have sold their $120 million cattle and carbon portfolio. Picture: Supplied

Also in Queensland, the ASX-listed Rural Funds Management and the Caldwell family from Milwillah Angus on the NSW South West Slopes, have taken an equal share in the 18,500ha Wyseby, located 62km south of Rolleston in a deal worth an estimated $60-$70 million.

Finally in the southern states, Lawson Grains, backed by Sydney-based global forestry investment manager New Forests and Canada’s Alberta Investment Management Corporation, bought the Macneil family’s Green Park aggregation in the NSW Riverina, paying almost $40 million for the 2860ha of mixed farmland near Rand. The portfolio adjoins its neighbouring 8255ha Borambil Aggregation.

Meanwhile the 1230ha Allanvale rural estate in North East Victoria was sold by the Beddison family to the founder and CEO of Melbourne-based Phoenix Lithium Nick Wakim. In western Victoria Chinese wool tycoon Qingnan Wen of Tianyu Wool purchased the 1664.5ha, 170-year-old mixed farm Nerrinyerie, located near Harrow.

President of Tianyu Wool Company Qingnan Wen. Picture: Aaron Francis (The Australian)

Nerrinyerie adds to Mr Wen’s existing rural Victorian property portfolio which includes three iconic pastoral homes and 6000 hectares of Western Victorian grazing and wool-growing country which can carry more than 60,000 Merino sheep.

CBRE Australia agribusiness director Matt Childs said the forthcoming spring selling season will be a crucial time for the market.

“The level of buyer competition in the rural property market has significantly decreased compared to the past two-three years,” he said.

“With spring approaching, there may be an increase in the supply of rural properties on the market, and it will be interesting to observe how this impacts the market during a period of lower demand.”

Rural bank’s Mr Smith agreed and said he expected a more balanced market this spring compared to those in previous years.

“This tight supply will continue to be matched by reduced buying appetite,” Mr Smith said.

“Prices from 2022 may set a floor in the market as vendors may not sell if price expectations are not met by the reduced pool of buyers.

 “Family farming operators are still very active in the search for small ‘add-on’ block sizes, particularly small well-developed parcels that require little or no capital expenditure.”

BIGGEST RECENT FARM SALES:

$107M

BRUNCHILLY STATION, TENNANT CREEK (NT)
457,200 HECTARES
Buyer: Harris family, Mungindi NSW
Seller: Gina Rinehart (S. Kidman and Co)

UNDISCLOSED

NARYILCO, GLENGYLE AND DURRIE STATIONS, BEDOURIE (QLD)
1.96 MILLION HECTARES
Buyer: Appleton family, Clermont QLD
Seller: Gina Rinehart (S. Kidman and Co)

$80M

MOOLAN DOWNS AND OTTLEY STATION, ROMA (QLD) AND INVERELL (NSW)
10,029 AND 8371 HECTARES
Buyer: Gina Rinehart (Hancock Agriculture)
Seller: Packhorse Pastoral Company

$65M

GEMFIELDS PORTFOLIO, EMERALD (QLD)
4386 HECTARES
Buyer: Manulife (Canada) and Craig Pressler, Emerald QLD
Seller: Zadro family, Bundaberg QLD

$60-$70M

WYSEBY, ROLLESTON (QLD)
18,500 HECTARES
Buyer: Rural Funds Group and Caldwell family, Berthong NSW
Seller: Pedersen family, Rolleston QLD

BIGGEST RECENT FARMS FOR SALE:

$400M

PROJECT JAAL, MALLEE (VIC) AND GREAT SOUTHERN REGION (WA)
42,931 HECTARES
Seller: Paul and Deidre Cowan (Arkle Farms)

$180M

PARAWAY PASTORAL PORTFOLIO (BORAMBIL STATION, PIER PIER STATION, BURMAH STATION) VARIOUS (NSW)
43687 HECTARES
Seller: Paraway Pastoral Company (Macquarie Agriculture)

$120M

BALLANDRY STATION, GRIFFITH (NSW)
26,839 HECTARES
Seller: David Bartter

$65M-PLUS

MONDILBILI AGGREGATION, MORTLAKE (VIC)
3230 HECTARES

Seller: Downey Ampney Corporation (UK)

$60M-PLUS

TORRUMBARRY FARMS, TORRUMBARRY (VIC)
4031 HECTARES
Seller: Australian Fresh Milk Holdings