Property

Gunn Agri outlays +$40m for Qld gulf breeding property Abingdon Downs

Jon Condon, October 22, 2018

Brahman weaners being shifted on Abingdon Downs in Queensland’s gulf country

 

ABINGDON Downs, one of the larger breeding properties in Queensland’s lower eastern gulf region has been purchased by the expanding Gunn Agri Cattle Fund for an undisclosed price, but understood to be well north of $40 million.

The 484,000ha holding located 130km north of Georgetown settled this week, including 27,400 good quality Grey Brahman cattle.

Owners, Barry Keough and family’s Keough Cattle Co put Abingdon on the market for private sale two years ago, as part of a larger portfolio of five breeding/growing/finishing properties, with an overall price anticipated at the time of around $70 million. Click here to view Beef Central’s earlier story.

The cattle component of the Abingdon deal, with around 14,000 quality Grey Brahman breeders plus progeny, was worth around $20 milllion, speculation suggests, with a total purchase price (land and cattle) between $40-$50 million.

The Abingdon sale, part of succession planning within the Keough family, was negotiated through Bernie Frawley of Frawley Rural Services Australia.

The injection of livestock with the purchase takes Gunn Rural’s cattle numbers under management through the fund’s operating company, Cunningham Cattle Co, to 71,500 head.

Gunn Agri chairman Bill Gunn said Abingdon would play an important role in Cunningham Cattle Co’s breeding operations. The company ruled-out any acquisition of the remaining Keough Cattle Co assets (see details below).

Geographic spread

As part of its broader strategy, the fund’s manager, Gunn Agri Partners, has established a portfolio of quality pastoral assets in across five aggregations stretching from far north Queensland to the NSW border.

The Fund’s northern operations in the lower Gulf including breeding operations, as well as dedicated assets where cattle can be grown out prior to sale.

Cows and calves in the yards on Abingdon. Picture: Brad Wheaton

In February 2016 Gunn Agri bought 400,000ha Esmeralda station south of Croydon in north Queensland for about $40 million, a large-scale breeding operation to the southwest of Abingdon Downs. Esmeralda has been further developed since purchase through pasture improvement, fencing, yards infrastructure and a 30 percent increase in the number of watering points.

Young cattle are grown out at properties further south including the Fund’s 52,000ha Katandra aggregation near Hughenden, which includes both Katandra and Illalong, both settled in the second half of 2017.

Cunningham Cattle Co has also expanded it capacity to grow-out cattle through long-term agistment arrangements with experienced, large-scale operators.

The Fund’s southern operations include its Maranoa aggregation near Roma in southwestern Queensland, including Ballaroo, Ekari Park and Fairview, covering some 36,000ha, settled in December 2015. The Maranoa aggregation operates as an Angus breeding and grow-out operation.

The 18,000ha Goodar Station in southern Queensland was purchased by the fund in March 2016 and provides added breeding, fodder production for fattening and cash cropping capability.

Northern cattle from the Gunn Agri operations are sold as young cattle, grassfed meatworks cattle or into the live export trade, with calves bred further south sold mostly as feeders.

Assets under management reach $200m

In a statement issued this morning, Gunn Agri said its Cattle Fund held its fourth and final close last Monday, receiving institutional and sophisticated investor commitments from Europe, North America and Australia. Including the Abingdon acquisition, assets under management for its Cattle Fund are expected to reach A$200m.

The Fund has also released financials for the year to 30 June, with the Net Asset Value for the Fund at $1.12, up from the inception value of $1.00. Overall performance during the investment period was in line with Gunn Agri’s expectations considering the J-curve impact of transaction costs incurred during the investment period.

The Fund’s land portfolio had increased in value by 7.9pc above the previous financial year valuation, plus capital expenditure for the 2018 fiscal year (excluding stamp duty and acquisition costs). This had taken total portfolio uplift to 34.5pc for the period from inception to 30 June this year.

Gunn Agri said the growth in the Fund’s land portfolio had outperformed the market for pastoral land due to strategic development of watering points and infrastructure, the improvement of grazing productivity through land development and the transformation of pasture land to cropping in the portfolio’s southern properties.

“Gunn Agri has consistently deployed commitments within the Fund’s targeted geography within a relative short time frame, meeting one of the key pillars of the Fund’s objectives of buying assets well and building a portfolio of working assets,” the company said.

Gunn Agri Partners is a farm and asset management company focused on the development and ongoing operation of agricultural assets for institutional and large-scale investors and also undertakes advisory work on horticulture, livestock, irrigated and row cropping.

Gunn Agri Partners is currently progressing investment opportunities in cropping and permanent plantings of almonds in addition to its cattle strategy.

Remaining Keough Cattle Co assets for sale

Abingdon was well-known as one of Stanbroke Pastoral Co’s flagship gulf/peninsula breeding properties for more than 30 years, bought by Stanbroke in 1968, soon after the company’s formation, and sold to the Keough family during a portfolio reduction in 1999.

Country currently in production on Abingdon covers some 330,000ha, including stock watering systems using poly pipe from the Einasleigh and Etheridge Rivers. The river frontage country is fertile alluvial silt subject to periodic flooding and supports improved and natural pastures. There is 4000ha of blacksoil plains which grows large stands of both Mitchell and Flinders grass, along with native pasture and herbage.

Off the river frontages the country includes areas of forest Mitchell, blue grass, stylos and messmate.

Four other adjoining Keough Cattle Co properties located in the Richmond/Winton/Hughenden region remain on the market as a private listing through Frawley Rural Services Australia.

They include adjoining holdings 14,600ha Judith Royl, 13,700ha Robyn Downs and 16,900ha Hamilton Downs. The fourth property being offered is the 24,100ha Star Downs, on predominantly downs country at Stamford.

The collection of quality breeding/finishing blocks are being offered as a line, bare, but some thousands of cattle are available for negotiation.

 

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