Rural property sales: Australia’s most expensive farms on the market
As the spring peak selling season kicks in, billions of dollars’ worth of farms are expected to change hands. See what’s on offer, and where.
Australia’s rural market is in for a spring fling with experts tipping record prices during the peak selling season of the next few months.
Billions of dollars’ worth of farms are expected to change hands this spring as vendors capitalise on unprecedented demand driven by low interest rates, record agriculture commodity prices and improved seasonal conditions across the nation.
Spring is set to follow in the footsteps of a record autumn and winter for farm sales, when many transactions exceeded even the wildest expectations of sellers.
LAWD senior director Danny Thomas expects the rural property market during spring to remain under-supplied.
“Demand will continue to outstrip supply,” Thomas says. “Inquiries are out of control at the moment, I have had over 100 for one property. There’s so much positivity in the industry … people want to buy more country.
“So we can expect that prices will keep on increasing.”
Victorian farmer and National Farmers’ Federation vice president David Jochinke says rural property prices have “gone through the roof” during the past two years. “The capital growth in land has been absolutely staggering … they would have easily doubled in the past 24 months.
“It is a windfall for farmers but it is making it hard for anyone entering the market or even wanting to expand.”
Major transactions this year have included the $500 million-plus sale of NSW-based cotton farming giant Auscott to Australian Food and Fibre, backed by Canada’s PSP Investments.
PSP — which manages the superannuation funds of the nation’s public service, armed forces and the world-famous Royal Canadian Mounted Police — has well and truly flexed its investment muscles in recent years by putting together a huge portfolio of land and water assets valued at more than $4 billion.
Its stamp sits at the bottom of the three biggest deals in Australian agriculture history — the $860 million purchase of Olam Orchards’ almond plantation in northern Victoria in 2019, last year’s $854 million takeover of one of Australia’s biggest landholders in Webster Limited and, this year, the Auscott deal, which includes 22,000 hectares of developed irrigation country and more than 143,000 megalitres of water entitlements, five ginning facilities, two warehousing operations and a classing laboratory.
PSP also recently paid $40 million for the historic Tubbo Station near Narrandera in southern NSW with its joint-venture partner Hewitt Cattle Australia.
PSP natural resources managing director Marc Drouin says the purchases fitted in well with the fund’s growth plans.
Drouin says the remit for the natural resources arm of PSP is to be at 5 per cent of the fund’s total allocation, and given the business has “been growing at a fairly healthy clip” it is expected “to double or so in the next 10 years”.
“(That) means (from a natural resources point of view) we’ve got to double again our deployment,” he says. “If you think of the past two or three years, we’ve invested somewhere between $C2 billion ($2.2 billion) and $C3 billion ($3.3 billion) on average a year — a large part of that has been in Australia — and I don’t see that slowing down anytime soon.”
Drouin says PSP is very much a long-term investor and a relatively young pension fund which means “there’s a long time before the liabilities start kicking in — so to find opportunities to invest where we can get a liquidity premium is attractive”.
“In natural resources we have that; these are long-term assets — you really need to be focused long term to get the benefits and see through the cycles,” he says.
“When we go into an investment we are always thinking decades, not years, and in theory these could be forever-type investments within reason.”
Auscott was one of a growing number of major portfolios on the market this year, as investors seek to capitalise on capital growth and strong land prices. US private equity firm Proterra Investment Partners last month listed its 22,500-hectare Corinella Group of almost 50 properties in Victoria and South Australia for $350 million. It is understood to be one of the biggest-ever offerings of prime farmland in southeast Australia.
Earlier this year Macquarie Agriculture – the nation’s second-biggest farmland investor – offered its Lawson Grains portfolio comprising 105,000 hectares, or more than a quarter of a million acres, of cropping land in NSW and Western Australia while billionaire mining magnate Gina Rinehart listed $300 million portfolio of seven cattle stations and a feedlot for sale in the Northern Territory and Western Australia. European-backed THF Finance last month offered a portfolio of five properties covering 21,900 hectares, west of Rockhampton in Queensland.
Other major properties on the market include the 1.3 million-hectare Walhallow and Amungee Mungee stations in the Northern Territory, listed by billionaire retail king Brett Blundy for $230 million, the 15,000-hectare Shenhua aggregation on the NSW Liverpool Plains, which is expected to fetch more than $122 million, and the Bartter family’s 26,945-hectare Ballandry Station near Griffith, with a price tag of about $80 million.
Major sales of note in recent months include Stonehouse at Lemont in Tasmania which sold for $47 million – one of the dearest prices paid for rural property in the state for decades.
Buln Gherin at Stockyard Hill in Victoria’s Western District also recently changed hands for more than $35 million.
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