EMERGING beef industry investment vehicle Packhorse Pastoral Co has paid $27 million bare for noted large-scale Roma district grazing property Stuarts Creek, as the foundation for its first round fund-raising.
The transaction included another $3 million for around 800 breeding cows plus calves, valuing the overall deal at around $30 million.
The sale price represents one of the biggest single grazing property deals struck in Queensland’s Maranoa region. On a bare basis, the sale price represents around $3230/ha, or a little over $1300/ac. Depending on location and size, good quality grazing country in the Roma area has recently been making between $2500/ha and $4400/ha, without infrastructure, local agents suggest.
The 8360ha Stuart’s Creek, one of the better known large scale properties in the Maranoa district, is a located 45 km northwest of Roma. The property is a good balance between open downs country and areas of lighter forest, with a high standard of improvements and infrastructure.
Under excellent land and livestock stewardship, vendor John Galwey has bred herd bulls and commercial Hereford cattle on the property for the past 50 years, hosting the prestigious annual Stuart’s Creek Hereford bull sale each year since the 1970s.
The sale deal is understood to have been struck back in March.
Successful fund raising
Packhorse said its recent first round of fund-raising had been highly successful, securing $62.5 million as part of a plan to raise $300 million in equity in its first year to be directed into ‘regenerative’ agribusiness.
The purchase of Stuart’s Creek represented the first property in Packhorse’s five-year $1.5 billion acquisition plan.
Potential for carbon sequestration
Packhorse Pastoral Australia chairman, Tim Samway, said the excellent response to the first fund raising round confirmed investors’ desire for opportunities that “deliver environmental impact combined with strong returns.”
“We are pleased with the confident response from the investment community to this unique opportunity,” Mr Samway said.
“Our mission to build the greatest land custodian, land restoration and beef supply chain business in the world is supported by our new shareholders in the company,” he said in a statement.
“We have many high-net worth individuals now interested in our next fund raise. The expected financial returns generated by our business model are solid, but it’s the additional value of our environmental impact and the potential for carbon sequestration that has captured the attention of investors.”
National conversations about the opportunities in regenerative agriculture were becoming ‘commonplace’, Mr Samway said.
“Essentially, we’re giving people an opportunity to buy into a business underwritten by high-class agricultural assets which will have a positive impact on the climate, our environment and our food supply. Furthermore, an investment will produce regular income from a non-correlated asset class with a long history of consistent capital growth.”
He said Packhorse’s investors were ‘acutely aware’ of the financial opportunities that come with the increasing demand for organisations to become carbon neutral.
Packhorse is currently deploying sizeable programs to generate carbon credits which have the potential to provide long-term upside for its investors, Mr Samway said.
“Stuart’s Creek is premium pastoral land with good water sources and grass cover and satisfies Packhorse’s strict acquisition criteria, which enables the company to meet its environmental and financial obligations through its principles of regenerative agriculture.”
“Our team, led by Packhorse managing director and experienced cattle property manager Geoff Murrell, is looking forward to realising the land improvement opportunities at Stuart’s Creek and implementing the Packhorse process to achieve optimal biodiversity,” Mr Samway said.
He said Packhorse and its scientific team assessed each pasture to calculate a baseline level of soil organic carbon, and would then undertake mass introduction of plants, grasses and cultures to the soil.
“Introduction of specific flora combined with higher livestock grazing density assists the regenerative process and in turn improves the value of the land through an increase in the carrying capacity of each property,” the company’s statement said.
Packhorse said it was actively negotiating a pipeline of agricultural properties between Coonamble in New South Wales and Taroom in Queensland, ahead of the next round of funding in September 2021.
Packhorse Pastoral Co (Australia) Ltd is an Australian investment company managing agricultural assets using land restoration practices – “leading the way through sustainable practices in protecting and improving agricultural land and contributing to solving global food security issues.” Packhorse Investments Australia Pty Limited is the investment and asset manager for the Packhorse Pastoral Co assets and operations.