US-backed investment firm sells rural portfolio for more than $350m

A huge tract of prime cropping land in Victoria and South Australia is set to return to Aussie hands as part of a landmark deal.

ONE of the biggest-ever offerings of grain farms in southeast Australia has sold for more than $360 million.

The US-backed private equity firm Proterra Investment Partners has sold its Corinella Group of almost 50 farms covering 22,500ha in Victoria and South Australia.

Proterra said in a statement the portfolio was split up and sold to 27 different Australian purchasers after receiving 63 formal expressions of interest during the marketing process.

The Corinella Group was listed for sale in August with price expectations of $350 million.

Managing director Becs Willson stated that the decision to split up the portfolio was driven by unprecedented demand from the local community driving the strongest possible outcome for Proterra’s investors.

The sale price represents a projected gross return at final close of more than 20 per cent.

“Despite the additional work created by splitting up the portfolio, it is wonderful to see these assets return to local farmers who in some cases have been waiting years to expand their holdings,” Ms Willson said.

“It demonstrates the value that corporates bring to the agriculture space in aggregating, developing and operating large-scale farming enterprises but also being flexible enough to determine the best exit strategy to meet the market and an absolute focus on maximising value for investors”.

The sale was managed by Danny Thomas, Tom Burchell and Elizabeth Doyle of LAWD.

Expressions of interest for the massive portfolio, which includes water entitlements of 5778 megalitres, closed on October 7.

Ms Willson said the sales process involved 260 inquiries and 100 property inspections which resulted in 63 formal expressions of interest.

The Corinella farms are located around Lake Bolac in Victoria’s Western District, north of Ararat and Stawell, around Navarre in the Wimmera and at Naracoorte in South Australia.

The Weekly Times understands the deal, including plant and equipment, was worth about $370 million.

Proterra’s first agricultural investment in Australian farmland was in 2009 when it was part of Cargill at Black River Asset Management. Black River was a majority investor in BFB, a family-owned cropping and grain storage operation covering 44,000ha in the Riverina, which sold to Canada’s PSP Investments in January 2019.

Proterra’s initial acquisition for the Corinella portfolio occurred mid-2015 and occurred over a four year period. Its partnership operating model has transitioned these individual farms into highly productive revenue generating aggregations using the latest agricultural technology available and ensuring best management practice.

“Proterra’s strong commitment to employee and social governance principles are showcased throughout the portfolio via the use of cutting-edge technologies to minimise fuel usage; utilisation of organic fertilisers that allow soil microbes to flourish, and establishment of baselines for green carbon projects,” Ms Willson said.
Mr Thomas said he was “overwhelmed by interest” in the portfolio. “A number of really well-credentialled parties missed out, which bodes well (for continued strong demand for rural property,” he said.

The Australian rural property market has hit record levels this year, driven by low interest rates, strong commodity prices and improved seasonal conditions.

Other major assets on the market include Aware Super’s farming portfolio around Lake Boga in northern Victoria, which is expected to fetch $150 million.