‘Cautious optimism’ guiding Australia’s rural property market

The rural property market is on the march again as the seasonal outlook shows promise. See what’s next for farm prices.

A turnaround in forecasted weather conditions, improved cropping returns and livestock prices have boosted sentiments in a rural property market that witnessed withdrawn interest and apprehension in the final few months of last year.

But a “cautious optimism” has returned this year following a number of significant farmland deals struck in recent months worth more than $600 million.

Most notably Hong Kong-based Australian citizens the Hui family, and their Archstone Investment Group, have sold the 2.9 million-hectare Kimberley Cattle Portfolio, with the Canadian investors behind the Lawson Grains cropping empire securing the mighty offering.

Alberta Investment Management Corporation and its Sydney-based investment partner New Agriculture paid a reported $300 million for the stations, subject to regulatory approvals.

The Kimberley Cattle Portfolio was sold for a reported $300 million last year to Alberta Investment Management Corporation and its Sydney-based investment partner New Agriculture.

Meanwhile, at the third time of asking, Australian poultry pioneer David Bartter has found a buyer for his $120 million, 26,800-hectare cropping aggregation, Ballandry Station, north of Griffith in the NSW Riverina.

Excel Farms, the Ararat headquartered partnership between Nick Paterson – the son of prominent Western District landholders and ACE Radio owners Rowly and Judy Paterson – and Canada’s Fiera Comox Partners completed the purchase, expanding into NSW for the first time.

LAWD senior director Danny Thomas says above-average rainfall across much of Australia has improved demand in the rural property sector significantly.

“The market was in a place of real negative sentiment following the BOM’s weather predictions, which consequently had an effect on livestock markets and prices. Paired with the rapid rise in interest rates, it really cruelled confidence in the later part of the year,” Thomas says.

“There were deals that fell over, some properties didn’t reach indicated levels for prices, while some sellers accepted 2021-22 levels, others had to get creative with deals to preserve value.

“Institutional buyers and fund managers also pulled up, worried they were going to catch a falling knife in case of a significant price correction.

“But from the middle of January we have seen interest return, there is much more grass around, cropping returns were good and there is a much more favourable rain forecast into this year, with the chance of another La Nina year.”

CBRE Agribusiness director Matt Childs says he expects the nation’s weather to have a major impact on how farmland values change this year.

The historic Greystones farm, near Bacchus Marsh, was sold last year to China’s Guangxi Qiutian Investment Co. Ltd.

“The projected outlook for rural property prices in 2024 indicates a potentially stable market with a possibility of slight growth,” he says.

“The forecast, however, is highly dependent on the weather, which has a notable impact on land prices.

“Early in 2024, Australia’s rural property market appears to be showing signs of growth and increased buyer activity, likely influenced by the parallel growth in the livestock market and strong cropping yields, particularly in southeast Australia.

“This increase also aligns with the climatic conditions experienced during and after spring.”

Herron Todd White Victoria-Tasmania agribusiness director John Gunthorpe says he expects the rural property market’s two-speed economy to continue with second-tier assets unlikely to gather significant interest from buyers.

“Whilst I think there is growing uncertainty in some sectors there is also some cautious optimism back in the market,” he says.

“In general terms we expect prices to remain stable across the board, however, it is likely that some areas will experience slight softening in prices in line with weakening commodity prices, with these impacts particularly felt with secondary class properties or properties in need of significant capital expenditure.

“The key drivers for the property market this year will continue to be access and cost of capital, commodity prices and hopefully the continuation of removal of tariffs by China providing green shoots in certain sectors.”

BIGGEST RECENT FARM SALES

$300 MILLION
KIMBERLEY CATTLE PORTFOLIO, BROOME WA
2.9 MILLION HECTARES
BUYER: Alberta Investment Management Corporation (AIMCo) and New Agriculture
SELLER: Yougawalla Pastoral Co and Argyle Cattle Co (Hui family, Hong Kong-Australia)

$120 MILLION
BALLANDRY STATION, GRIFFITH NSW
26,839 HECTARES
BUYER: Excel Farms (Fiera Comox Partners (Canada) and Nick Paterson)
SELLER: David Bartter

$80 MILLION
GREYSTONES, ROWSLEY VIC
4033 HECTARES
BUYER: Guangxi Qiutian Investment Co. Ltd (China)
SELLER: Diana Gibson

$53.5 MILLION
GILGAL STATION, COOTAMUNDRA NSW
3605 HECTARES
BUYER: Lukas Asset Management’s Land und Fortwirtschaft fund (Germany)
SELLER: Palgrove (NZ)

$50 MILLION
BURMAH AGGREGATION, GRAMAN NSW
5437 HECTARES
BUYER: Gunn Agri Partners via Wilga Farming (CEFC-Australian government and CDPQ-Canada)
SELLER: Paraway Pastoral Company (Macquarie Agriculture)

BIGGEST RECENT FARMS FOR SALE

$200 MILLION
77,954 HECTARES
MERREDIN FARMS WHEATBELT PORTFOLIO, NORTH BODALLIN WA
SELLER: Saudi Agricultural and Livestock Investment Company (SALIC) Australia and PenAgri Farms

$130-$150 MILLION
BLACKWATTLE FARM AND VINEYARD AGGREGATION
5400 HECTARES
SELLER: Syndicate of WA families

$100 MILLION, PLUS CARBON CREDITS
MARYFIELD AND LIMBUNYA STATIONS, NORTHERN TERRITORY
668,000 HECTARES
SELLER: Wealthcheck

$90 MILLION-PLUS
COMMINS PORTFOLIO, WHITTON NSW
2807 HECTARES
Seller: Roger and Timothy Commins

$70 MILLION-PLUS
TIMBERSCOMBE AGGREGATION, WEST WYALONG NSW
8432 HECTARES
Seller: Duxton Farms