Millions splashed on well-known farms as spring selling season kicks off
More than $130 million has been splashed on the sale of four well-known farms. We reveal how much was paid for each farm and who snapped them up, plus the latest farms to be listed for sale.
THE starter’s gun has been fired on Australia’s spring property selling season with a $130 million-plus cash splash on farms in the past week alone.
Experts say demand for rural property is running hot, despite the devastating effects of coronavirus on the broader economy, with local and international buyers competing on the back of low interest rates, a favourable Australian dollar and “generally sound” rural commodity prices.
An expected reduction in property offerings this spring is also said to be a factor behind an increase in investor interest.
In the past week:
THE US-based Hancock Agricultural Investment Group purchased Rural Funds Group’s 3841ha Mooral almond property at Hillston in the NSW Riverina for $98 million in one of the biggest rural property deals of the year.
AUSTRALIAN-owned AAM Investment Group paid the ASX-listed Blue Sky Alternative Investments more than $20 million for two properties totalling 3900ha at Forbes in centralwest NSW.
THE well-known Terrica aggregation of 15,990ha in the Darling Downs region of southeast Queensland sold to the Grimwade and Gordon partnership for $14 million.
THE US-based TIAA – the world’s biggest farmland investor with about $1.7 billion in farmland and water assets in Australia – said it was open to partnering with local superannuation funds to build on its portfolio.
A PORTFOLIO of dairy farms in Victoria’s Gippsland totalling 2513ha and milking about 5000 cows, was listed for sale by local company Gray Wigg.
RICH lister and barrister-to-the-stars Allan Myers offered two farms in Victoria’s Western District with an asking price of more than $5 million.
CBRE Agribusiness director Shane McIntyre said this year’s spring property market was expected to be undersupplied.
“The calibre of property will be at its usual peak level but supply will be down on previous years, partly due to current sound returns, and in part due to the expectation that the current appreciation in value will continue for the medium term,” Mr McIntyre said.
“Demand will be widespread, qualified and eager. Local, interstate, and international buyers will all be participating and will be motivated by low-cost funding and generally sound commodity prices – particularly for red meat and grains.”
AAM Investment Group chief executive Garry Edwards, who this week confirmed the company’s $20 million-plus purchase of the 2788ha Bergen Park and 1111ha Warili cropping and livestock properties at Forbes said there was solid interest in agricultural assets.
“We went out for $15 million just as a small exercise in July and ended up with commitments exceeding $35 million so investor demand is there,” Mr Edwards said.
“The challenging component is how you introduce new investors (with COVID-19-related restrictions) – it is not quite as easy to do that over Zoom than it is face-to-face.”
AAMIG, backed by “100 per cent Australian family office, superannuation or sub-institutional superannuation funds” also owns properties in Queensland, NSW and the Northern Territory while also operating the Regional Livestock Exchange national network of saleyards.
Mr Edwards said the Bergen Park and Warili properties complemented AAMIG’s current investment portfolio at Forbes. It paid $16 million for the nearby three-farm 6460ha Sunshine Farms aggregation in January and in June finalised its purchase of the 58,000ha historic Terrick Terrick property at Blackall in western Queensland.
AAMIG also owns the 280,000ha Legune Station in the Northern Territory which it purchased in 2018 for about $62 million.
The confirmation of AAMIG’s Forbes purchase came just days after the ASX-listed Rural Funds Group announced it had sold Mooral property to the Boston-based Hancock Agricultural Investment Group for $98 million. Rural Funds said the sale was conditional on the completion of due diligence and Foreign Investment Review Board approval.
Founded in 1990, HAIG manages more than US$3 billion worth of farmland globally.
Earlier this year it paid more than $120 million for 19,877ha of cotton and almond farms near Hillston from Harvard University’s endowment fund.
Meanwhile, investor eyes this spring are expected to fix on the Gray Wigg dairy farms at Nambrok and Winnindoo in Gippsland’s Macalister Irrigation District – believed to be one of Australia’s biggest dairy operations. Gray Wigg is a partnership of Gippsland trucking contractor Patrick Gray and Maffra local Lachlan Wigg.
Land data titles show Saputo Dairy Australia holds a mortgage on at least one of the Gray Wigg properties. The Canadian dairy giant took out the mortgage in June 2015 — a year after it bought Warrnambool Cheese and Butter but more than two years before it purchased Murray Goulburn.
Gray Wigg were major suppliers to Murray Goulburn’s Maffra factory and continued to supply Saputo.
Saputo would not say why it holds the mortgage on at least one of the Gray Wigg properties or if it had anything to do with the property being listed for sale. Mr Gray did not respond to requests for comment.
The farms are for sale by expressions of interest closing September 25, and a price is yet to be disclosed.
Rural property insiders questioned why, when those outside the area would be excluded from inspecting the farms due to COVD-19 restrictions, such a tight turnaround has been placed on the sale.
Gippsland dairy observers say Gray Wigg could be milking more than 10,000 cows, with further properties at Clydebank, north of Sale. These properties are not listed for sale.
In 2014, The Weekly Times reported Gray Wigg had purchased five neighbouring dairy farms at Nambrok, spanning 700ha, for $13 million.
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Meanwhile, Mr Myers’ Dunkeld Pastoral Company has listed the 531ha Heathwood and 139ha Harris properties in the Victoria Valley with asking prices of $4.5 million and $800,000 respectively.
Mr Myers, one of the nation’s leading barristers, recently snapped up a portion of the historic Dunkeld property Devon Park for more than $14 million.
In other rural property news, Martin Davies, the chief executive of TIAA offshoot Westchester Group Investment Management, this week told The Australian he was open to partnering with local institutional investors on new opportunities noting that he couldn’t “put my finger on exactly the reason why the (Australian) super funds haven’t done more in the agriculture sector”.
“Maybe the current situation (with COVID-19) will generate some more interest and we will see more activity,” Mr Davies said.
TIAA is the third-biggest investor in Australian agriculture. Through its asset manager subsidiary Nuveen it owns a whopping 286,000ha of mostly cropping country in Australia, spread across 71 properties and aggregations.
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