MACQUARIE Group’s Paraway Pastoral Co has signed contracts to purchase two showcase large-scale northern cattle properties owned by Western Grazing for a combined figure understood to be between $130 million and $140 million.
The acquisitions are Rocklands, a 677,964ha ‘calf factory’ breeding property near at Camooweal on the Barkly Tableland in Northwestern Queensland, and Tanbar, a 1.02 million hectare growing and finishing property in the Cooper Creek channels in South West Queensland.
The deal, including around 47,500 cattle, has already been approved by the Foreign Investment Review Board.
As reported back in February on Beef Central, Western Grazing principal Pam Deamer has decided to dispose of the two properties via an ‘off-market’ offer arrangement, in order to wind-back her grazing industry interests.
Paraway was not prepared to comment on the record further about the sale, beyond a one-line statement confirming the purchase this morning: “The acquisition of Rocklands and Tanbar stations are complementary to our existing portfolio and enhance our ability to deliver a consistent, reliable supply of quality livestock into key supply chains,” it said.
The purchase represents a significant development step for Paraway, in terms of re-aligning breeding location and capacity, and expanding grass finishing capacity.
The company last year sold its Walhallow breeding property on the Barkly Tableland to Brett Blundy, which has provided a cash reserve to help fund the latest purchases.
But why the shift from breeding at Walhallow to Rocklands? The answer is likely to lie in the fact that Rocklands is in tick-free country and will allow Paraway to use genetics more aligned with premium beef supply chains than it could on the Barkly breeding property, where higher Indicus content was required.
Paraway has for some time been seeking to achieve a balance of large-scale northern breeding country, both above and below the tick line, and it appears to have achieved that objective with the Rocklands purchase.
In the case of the Tanbar Channel Country property, it substantially adds to Paraway’s grass finishing and growing capacity. Paraway already operates Davenport Downs on the Diamantina Channels, but the addition of Tanbar, to the southwest on the Cooper, spreads the risk in those years when beneficial flooding might be better in one river system over the other.
Additionally, Paraway already has good experience in managing the Channel Country environment, through its operations on Davenport.
The two Western Grazing properties have a combined carrying capacity of about 65,000 head of cattle in normal seasons. Currently Rocklands is running around 40,000 head plus this year’s calves. Tanbar is currently understocked with about 7400 head due to earlier drought, but with normal capacity to run 23,000 adult equivalents.
The two recent acquisitions indicate that Paraway is in an acquisitive mood, having late last year completed an extension of the Macquarie Pastoral Fund’s term.
Beef Central understands that Paraway also undertook an inspection of Gulf breeding property Neumayer Valley before Christmas, but was unable to reach terms with the vendor (see yesterday’s subsequent sale report).
While a substantial amount of the capital for the Rocklands/Tanbar purchase was derived from the earlier sale of Walhallow, Paraway has indicated that it has settled on a ‘growth strategy’ with its investors, suggesting further acquisitions might lie ahead.
Busy sales period
The latest sale of the Western Grazing assets continues a sequence of sales of very large northern Australian grazing assets over the past month, which has seen 8.6 million hectares of northern grazing land change hands for a combined figure of around $527 million. It is arguably among the most condensed sequences for large northern grazing asset sales in history.
Apart from the Western Grazing sales outlined in this article, the past month’s significant northern sales include:
- Western Australia’s one million hectare SAWA aggregation, sold late last month for a figure around $100 million
- Queensland Gulf country property Neumayer Valley (143,000ha) sold earlier this week for a figure understood to be above $41m
- an 80pc stake in the 5.8m hectare North Australian Pastoral Co, bought by super fund manager QIC last week for a reported figure of $256 million.
In this February article on Beef Central, it was disclosed that a short-list of 11 international and domestic entities were in the running to purchase the Tanbar/Rocklands assets, when offered discretely to the market late last year. Ten of the 11 interests traced back to overseas finance – either European, North American or Asian.
Western Grazing principal Pam Deamer, the daughter of company founder the late Brian Oxenford, decided to dispose of the two properties via an ‘off-market’ offer arrangement, in order to wind-back her grazing industry interests. The company was taking advantage of the strong investment demand for beef cattle assets, a statement issued at the time said.
The sale of the two holdings to Paraway will still leave Ms Deamer with six substantial northern Australian grazing properties. They include part of the Oxenfords’ original purchase of Vesteys’ properties, including Wave Hill in the NT’s Victoria River District; Morstone near Mt Isa; Magowra in the gulf bought from the late Wallace Logan; Oban near Cloncurry; plus smaller southern holdings at Eurella and Augathella.
The late Brian Oxenford bought Tanbar and Rocklands in 2004 as part of the bust-up of Stanbroke Pastoral Co by new owner, the late Peter Menegazzo, following his buy-out of partners in the Nebo syndicate. In an unfortunate coincidence, both men were later to die in aircraft accidents.
Historically the two properties have worked well together, with the progeny from the Rocklands ‘calf factory’ being sent to the Tanbar ‘grass feedlot’ to grow and fatten. The properties are 1250km apart.
- Western Grazing was advised during the sale process by Ben Cameron, Bentleys Brisbane.