Victorian permanent water entitlements sold for millions

About 1040 megalitres in a Goulburn Valley permanent water entitlement have been sold for millions after initially being passed in at auction.

1043.30ML of high reliability 1A Greater Goulburn Permanent Water Entitlement was passed in through auction last week.

More than 1040 megalitres of Goulburn Valley permanent water entitlements have been sold for millions after they were initially passed in through auction last month.

On Friday, October 11 1043.30ML of high reliability 1A Greater Goulburn Permanent Water Entitlement in a single Water Entitlement Entity (WEE) Holding were listed for sale, offered via an online auction.

During the auction bidding on the water entitlements started at $4.1 million, before rising to $4.15 million following a vendor bid.

A bid of $4.16 million followed before the water entitlements were ultimately passed in through auction after failing to reach the reserve price.

The top bid was equivalent to $4022 a megalitre.

Several weeks later the water entitlements were sold via private negotiation to an undisclosed buyer.

It is understood the water entitlements have been sold for a figure greater than the final bid registered on the 1043.3-megalitre parcel.

By comparison, smaller parcels of 10-30-megalitres have been sold in deals worth $3600 to $3825 a megalitre. 

It is also understood the water will be put into local horticulture production in the Goulburn Valley. 

Colliers Agribusiness water advisory and transaction services  Matthew Tolmachoff handled the sale of the water entitlements. 

The water portfolio was offered for sale by Rocsange Pty Ltd, a holding company of Shepparton-based owners and directors Robert and Patricia Bryant.

“The area is transforming, moving from dairy farming to permanent plantings focusing on fruit and nut production,” Mr Tolmachoff said when listing the portfolio for sale.

“The increased demand for permanent plantings will lead to more water use, which makes this an opportunity for investors to improve the reliability of their farms by securing more water entitlement.

“Market interest and prices for permanent water entitlements are gaining momentum as interest rates stabilise in the second half of this year.

“The investment sector is aligning its strategy with predictions of lower rates next year and a stable BOM weather forecast.

“Investing in water now, prior to the announced Commonwealth buyback program takes full effect, will take advantage of a long-term repositioning of increased demand for limited supply of water licences.”