LARGE-scale well developed Central Queensland buffel-grass country cattle property Rewan, near Rolleston, has been bought by the listed Rural Funds Group as part of its first major push into the beef sector.
Real estate investment trust RFG has well-established ag investments in almonds, poultry, vineyards and macadamias, but its $50 million acquisition last week of three grazing properties plus cattle in Central and Northwest Queensland is its first substantial beef play.
The company has an ambition to become a significant player in the Australian cattle industry after buying 17,500ha Rewan station near Rolleston, in Queensland’s Arcadia Valley in an off-market deal with vendors, the Veivers family, plus two other breeding properties further north.
Also included in the purchases are Oakland Park and Mutton Hole, two gulf district breeding properties east of Normanton understood to be owned by the Jefferis family from Cloncurry. The three holdings combined cover some 242,000ha.
The three properties acquired for $42m and the 11,000 cattle bought for an additional $8m, will be leased for ten years to Cattle JV, a subsidiary of Rural Funds Management.
The property purchases and a $61m capital raising will position Rural Funds as the only real estate investment trust in the sector, in which the Australian Agricultural Co is the largest listed cattle and land company.
Rural Funds says the move was part of its plan to expand its portfolio of cattle assets in northern Australia.
In a typical northern integrated supply chain move, calves bred at Mutton Hole and Oakland will be transported to Rewan’s better country for finishing.
RFM describes itself as one of the oldest and most experienced managers of agricultural assets in Australia. The company employs more than 70 staff in fund and asset management activities.
Managing director David Bryant established RFM in 1997. Since then the company has acquired $390 million in agricultural assets across eight Australian agricultural regions. This has included negotiating the acquisition of more than 35 properties and over 70,000 ML of water entitlements.
“The Australian cattle industry in northern Australia is attractive to us because of our desire for climatic diversification. It’s also a high value commodity and Australia’s largest agricultural industry,” Mr Bryant said.
“The timing appears to be very good – there’s been a once-in-a-decade increase in cattle prices but as yet no significant increase in the value in value of the land,” he said.
Mr Bryant said RFM had been searching for a suitable leased cattle property investment but had decided to act now and make acquisitions to establish a footprint in the industry. This would help attract a lessee, he said.
“That’s been our experience in almonds and wine and we expect to repeat that in cattle.”
He said that taking on the operation risk initially would give the group intimate knowledge of how the cattle industry operates and build a network in the sector.
- Gary Bishop from Hourn & Bishop, Moura negotiated the sale Rewan, while Peter MacPherson from RuralCo was the agent for of Oakland Park and Mutton Hole.