Property

Emerging Chinese investor interest, as NT property sales build momentum

Jon Condon, 14/04/2015

SEVERAL significant extensive grazing land sales have been completed in the Northern Territory during early April, and more might be on the way, property sources suggest.

After a sequence of years where cattle land transactions in the NT have been moribund, at best, the market is showing a much stronger sense of direction, both in terms of transaction numbers and beast area value paid.

northern-cattle-generic-webTwo recent sales have made adult equivalent beast area values not seen in the NT since at least 2009-10, giving further weight to evidence that the top-end property market is now in strong recovery mode.

As discussed in greater detail in a separate Beef Central article today, NT properties settled this month include Douglas Station, 1550sq km south of Adelaide River, and Stapleton, a smaller 60,000ha block to the southwest of Katherine.

Also under contract, but not yet settled, is Moroak, 2329sq km to the East of Katherine, which is changing hands for a reported $17 million with about 18,000 cattle. Click here to access this morning’s companion article.

Last week’s sale of Douglas Station represented a beast area value of $1124/head, however strategic location, right on the bitumen highway south of Darwin, was obviously a factor in that result. The smaller Stapleton sale was valued at $960/beast area – both arguably representing the highest AE value seen in the Territory for five years or more.

It is anticipated that the sale of Legune (click here to view earlier report) will represent an even higher beast-area sale price than those two examples, but while the Access and Option (AOA) documents have been signed, the property is yet to reach settlement. Legune is a unique case, however, being developed by the potential new owner Seafarm Group for a huge aquaculture project.

International interest

Significantly, several recent NT property offerings have attracted international interest, suggesting last year’s precedent-setting sale of Elizabeth Downs to Chinese interests – the first in the NT to a Chinese entity – may not be an isolated case. Yiang Xiang Assets paid a reported $11.5 million for Elizabeth Downs, excluding about 8500 cattle, for a total sale price of $16.6 million.

Rawdon Briggs & Thomas Warriner from Colliers International both declined to comment on the Douglas Station and Elizabeth Downs sales. Both have confirmed that overseas buyer interest in the NT market is significant and Elizabeth Downs will not be the last sale to this buyer group. A number of separate Chinese entities, not connected with the Elizabeth Downs deal, had shown interest in various off market properties in North Australia.

“We’ve had two other NT listings that have attracted offers recently from Chinese investors,” Mr Briggs said. “Elizabeth Downs won’t be a one-off in terms of northern sales to Chinese buyers, in our opinion.”

While he chose not to nominate specific examples, Mr Briggs said Colliers had other Chinese offers on the table for NT cattle holdings.

Colliers’ current list of NT cattle holdings for sale includes:

  • Kiana, a 3318sq km holding just above Cresswell Downs on the northern extremity of the Barkly, owned by Indonesian-based Oceanic Cattle Co. Oceanic sold most of its cattle herd to AA Co in 2012
  • Bonalbo, a well-developed Freehold block in the Douglas-Daly region
  • Kingfisher, also in the Douglas-Daly
  • Scott Creek 1018sq km west of Katherine; and
  • Ban Ban Springs near Adelaide River.

The agency says it has two other NT holdings currently off-market, but likely to be put to buyers soon, which cannot currently be disclosed.

Apart from Scott Creek and Ban Ban, which came on the market mid-last-year, the others have all surfaced in the past six weeks or so – arguably aiming to pick up the momentum that’s being seen in the NT grazing property market at the moment.

Colliers' Rawdon Briggs

Colliers’ Rawdon Briggs

“With the Australian dollar trending down, and cattle prices and live export prospects remaining very strong, I wouldn’t be surprised to see a number of other large NT holdings hit the market before the dry season really sets in around mid-year,” Colliers Rawdon Briggs said.

Mr Briggs has just returned from a tailored ‘Australian Property Roadshow’ to Shanghai, Hong Kong and Singapore, pitching NT cattle holdings, primarily to potential Chinese buyers. This platform has delivered more than $450 million in property settlements in 2014 alone for Colliers International clients (all property segments, not just rural).

Colliers will engage with prospective Chinese investors again during the Beef Australia 2015 industry exhibition in Rockhampton next month, where international delegate numbers registered for the event have now gone past 730. Roughly half of those appear to be Chinese in origin, emphasising the massive growth in interest in trade in Australian beef and livestock – and potentially, land investment. At the previous Beef Expo held in Rockhampton in 2012, Chinese attendance was no more than about 30 people.

Austrade is also positioning to capture the opportunity posed by the large attendance of Chinese at Beef 2015 by hosting a trade and investment forum in Brisbane on April 30, just prior to the Rockhampton Expo. The objective is to showcase opportunities in both beef business opportunities and investment in land and infrastructure assets in Australia.

Colliers is a co-sponsor of both the Brisbane trade forum, and the International Lounge at Beef 2015.

The Brisbane forum will be presented in bi-lingual form, in both Mandarin and English.

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