Huge deals dazzle ag property market

Significant agricultural property sales to overseas buyers continue to defy Australia’s dry conditions.

Patchwork: Cotton growing on Webster’s Tandou Station near Menindee.

AUSTRALIA’S rural property market is firing on the back of near-billion dollar deals and multimillion-dollar listings.

In a trend experts have labelled “unprecedented”, some of the nation’s biggest corporate portfolios and showpiece properties have either been sold, hit the market or been subject to takeover bids in recent months.

And agents claim the strong global and domestic demand for rural property is defying widespread drought conditions and industry and farmer concerns about water availability across Queensland, NSW and Victoria.

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Most talk in property circles in recent months has been of the proposed $854 million takeover of the ASX-listed Webster Limited – Australia’s fourth-oldest company and one of the nation’s biggest land and water holders – by Canada’s Public Sector Pension Investment Board. That deal is subject to a shareholder vote next year.

PSP manages the superannuation funds of Canada’s public service, armed forces and the 30,000 member-strong mounted police and is already a significant player in Australian agriculture.

Just a week before its Webster bid the Montreal-based fund was the joint buyer, with Australian Food and Fibre, of cotton giant Auscott’s Midkin vertically integrated aggregation near Moree in northern NSW for a rumoured $300 million.

In the past 18 months, PSP has paid $208 million for a majority stake in the 44,000-hectare BFB portfolio of cropping farms around Temora in southern NSW, $132.7 million in a joint venture for the 9593-hectare Bengerang and Darling Farms aggregations in northern NSW and $16 million for a 519-hectare vineyard at Cullulleraine, west of Mildura.

It also has financial interests in Hewitt Cattle Australia, which runs 11 cattle stations in Queensland, NSW and the Northern Territory, the Stahmann Farms walnut and almond business in NSW and South Australia and Daybreak Cropping with its five aggregations totalling more than 45,000 hectares in Victoria, NSW, Queensland and Western Australia.

The investments by PSP is part of a broader, growing trend of Canadian interest in the Australian rural property market.

CBRE Agribusiness regional director Danny Thomas said there was a “cultural alignment” between the two nations which impressed Canadian investors.

“We are the southern hemisphere version of them – there are so many similarities,” Mr Thomas said. “They understand agriculture and natural resources because of what they’ve got at home. They can also see past the current dry conditions and are happy to invest in Australia in the longer term.”

Other significant property moves in recent months include British investor Guy Hands’ $700 million bid to buy the remainder of one of Australia’s biggest pastoral empires, Consolidated Pastoral Company. Mr Hands is the chairman and founder of UK private equity firm Terra Firma Capital – CPC’s majority shareholder.

Another major property player, Rural Funds Group, last month announced plans to offload its loss-making poultry operations for $72 million, which it will then reinvest in three Western Australian cattle properties. The network of 17 poultry farms in southern NSW and Victoria have been snapped up by ProTen Investment Management, a specialist developer and operator of broiler chicken farms with significant industry presence, including at Griffith, NSW.

MAJOR RURAL PROPERTY SALES IN RECENT MONTHS

$25-$30 MILLION

The 7230ha Karamarra property north of Dingo in Queensland, sold to Western Australia’s Kumarina Holdings.

$23.4 MILLION

The 380,000ha Manbullo Station at Katherine in the Northern Territory, sold to the Argentine Buratovich family in a sale and leaseback deal. The Buratovichs also departed with $12 million for nearby Scott Creek Station.

$20 MILLION

The 142,600ha Retreat property near Jundah in Queensland, sold to the Brig-O-Doon Cattle Company.

$20 MILLION

The 2051 Torrumbarry Estate dairy farm west of Echuca in Victoria, sold to Australian Fresh Milk Holdings. AFMH is also believed to have purchased an additional 810ha of adjoining land.

UNKNOWN AMOUNT

The 3900ha Warrabah Station near Manilla in the NSW New England, sold to mining magnate Gina Rinehart.