Weekly property review: Top dollar for beef aggregations

Property editor Linda Rowley, 31/08/2016

NAPCo Boomarra cattle northern - Copy


WHEN it comes to doing a deal, corporate entities are well known for carefully assessing potential profits and strategic advantages before signing on the dotted line.

In today’s market, corporates are increasingly seeking-out aggregations of well-connected and logically-integrated grazing properties, and are not shy about paying above perceived market value in order to secure a long-term profitable, investment. That applies, particularly, when it may take years – even decades – to put the same aggregation of properties together piece-by-piece, in a tightly-held market.

In this week’s column, Property Central provides a snapshot of beef aggregations that have sold, or are currently on the market, and the rationale behind such deals.



In April, the Botha family’s SAWA Pastoral Co sold four integrated Kimberley Stations – Moola Bulla, Mt Amhurst, Beefwood Park and Shamrock – for $100 million to a new fund assembled by Adelaide-based Agrify. Covering just over one million hectares and comprising 47,000 head of cattle, the aggregation was nearly sold to Gina Rinehart’s Hancock Prospecting last year for $65m.

  • Western Grazing

In May, Macquarie Group’s Paraway Pastoral paid the Oxenford family’s Western Grazing $148m for the 677,964ha Rocklands Station, situated on the border of Queensland and the NT on the Barkly Tableland near Camooweal, and the one million hectare Tanbar Station, a large-scale growing operation on the Cooper Creek in the Channel country of western Queensland. The two properties, including 45,000 head of cattle, were earlier expected to achieve between $115m to $120m.

  • NAPCo

Also in May, superannuation investment manager Queensland Investment Corporation purchased an 80pc stake in the North Australian Pastoral Co for more than $300 million. NAPCo runs more than 178,000 head of cattle across 13 stations, spanning 5.8 million hectares, in Queensland and the NT.

  • Smaller scale aggregations

Late last year, a private Brisbane-based property developer sold the 11,500ha Ballaroo, the 13,350ha Ekari and the 11,400ha Fairview aggregation in south and western Queensland to Gunn Agri for more than $11m.

For Sale:

  • In April 2015, Australia’s biggest private landholder, S. Kidman & Co was listed for sale. Covering almost 11 million hectares, it comprises the world’s largest cattle station, Anna Creek Station in South Australia, as well as Durham Downs, Durrie, Glengyle, Morney Plains, Naryilco and Rockybank in Queensland; Innamincka, Macumba and Tungali in South Australia; Helen Springs in the Northern Territory and Ruby Plains in Western Australia. It is currently being offered for $371m, after being initially valued at around $300m.
  • In an off-market campaign, Raine & Horne Rural is offering a large-scale south-west Queensland grazing aggregation. Comprising several properties, it covers 130,000 hectares and is located 140km south-east of Cunnamulla.
  • In another off-market campaign, the 445,154ha Abingdon Downs, near Georgetown in the Gulf of Carpentaria, owned by Keough Cattle Co, is up for sale along with a portfolio of smaller properties (see today’s separate report). They include 14,600ha Judith Royl and neighbouring properties the 13,700ha Robyn Downs and the 16,900ha Hamilton Downs in the Richmond/Winton/Hughenden region, as well as the 24,100ha Star Downs Station at Stamford. There has been substantial overseas interest in the aggregation which is reportedly being offered for $70m.

CBRE Agribusiness senior manager Tom Warriner said aggregation and portfolio sales were attracting large corporates or financial funds that are willing to pay ‘top dollar’ for the right collection of properties.

“There are two reasons. Firstly, the price of beef has been steadily rising and is now doing extremely well, so on-farm returns are rising. Secondly, buyers are expecting quality rural land to hold value well in the medium to long-term, and be a good option for capital gains.”

“As a result, buyers are willing to pay more for land with the potential profits from beef.”

“Some interest is coming from listed funds; others are domestic or international funds. Each company has strict guidelines to secure returns for their investors. For many funds, they need to achieve a rate of return of upwards of seven percent for the investment to be viable. So, it is a good time to be looking at it either in investing in these funds or putting together a syndicate and investing directly now that investment grade returns are more easily accessible in the beef industry,” he said.

Mr Warriner said there were advantages in offering a portfolio of properties.

“One example is CBRE listed 15,000ha Willesley and 17,500ha Laurel Hills Stations near Clermont in Central Queensland. One has farming and the other has a feedlot. Putting the two properties together has created a scaleable enterprise with a carrying capacity of 12,000 head of cattle plus the feedlot capacity,” he said.

There was also the opportunity for local landholders to aggregate their properties and look for investor-style buyers who could afford to step out and pay real market value for larger aggregations of land.

An example is the grazing property White Rock in the Scone district of NSW. When buyer prospects making inspections of White Rock kept remarking on the irrigation infrastructure on the adjoining property, Colliers agent Matt Shaw convinced the Sydney-based owner of Shannandore to offer the property also – as part of an aggregation or separately. Mr Shaw said one lacked irrigation, the other lacked scale, but together the sum of the two equaled more than the parts.

Benefits to both buyers and sellers

Mr Warriner believes aggregations are a good idea for both buyers and sellers.

“Graziers might be making good money in the current climate, but if they are looking for a return, it is also the perfect time to sell,” he said.

But not everyone agrees. Charters Towers-based Lorin Bishop from Elders believes the Kidman places, for instance, would make more money if they were sold separately.

“That’s just a personal opinion. In this case, you are trying to find one particular buyer with a huge amount of money. If the properties are split up, it’s possible to attract a wider range of buyers.”

“I suppose aggregations are justified at present, because it is an unusual market situation which is booming at the top end and still very tough at the level of the normal grazier,” Mr Bishop said.


See today’s separate report on the Keough aggregation offering.





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  1. Graham johns, 01/09/2016

    I totally agree with lorin bishops statement.

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