The Standard | 21 February 2020
Massive farm sale makes WA history
by Mollie Tracey
A RECORD breaking deal has made Western Australian rural real estate history, as Erregulla Plains, Mingenew, was sold for $97.62 million.
Daybreak Cropping has been named the buyer in the walk-in, walk-out sale that settled two weeks ago, from vendors Stuart and Cherie Smart.
A longstanding rural real estate agent, with more than four decades of experience, said Erregulla Plains was the most valuable broadacre farm sale in State history.
The property, of 22,192 hectares, was sold for $90.6m, equating to $4082 per hectare.
The plant and machinery (with the exception of the earthmoving gear) was sold for an additional $7.02m.
Daybreak Cropping is a national broadacre cropping business formed from a partnership between Warakirri Asset Management (WAM) and Canada's Public Sector Pension Investment Board (PSP).
Ray White Rural WA principal Steve Vaughan handled the sale of the property and said it was the biggest deal of his career and for the company so far.
"This is quite a big milestone for us, I guess it would be for anyone," Mr Vaughan said.
"We are very fortunate that we were appointed and the whole sale went through with a limited amount of issues.
"There's always a bit more difficulty when you are doing the farm plus the plant because there is quite a bit more involved.
"I think both parties would agree that it went through quite smoothly."
At $4082/ha, he said the sale price reflected the strength of the rural property market, but more so the quality of the property.
"There have been other sales in the area around that price mark per hectare but Erregulla Plains was a very well-farmed property with extremely well-improved buildings and the internal roads were at a new level that I had never seen before," he said.
"It provides easy farming with straight lines and internal roads have been put in to support that."
Another key feature of the property was that it was all confined into one boundary, which is a rarity for a property of this scale.
Mr Vaughan said there was interest from other corporate parties - both local and international - as well as local farmers.
He said foreign investment was an important part of the agriculture industry.
"I think it is a terrific thing that we all have this investment money coming into agriculture as the foreign investment companies are pouring money into capital improvements and I think it is good for the whole industry," he said.
"I think this sale will bring a whole lot of new people into the district from the point of view of staffing the property and I think a further injection of capital will be a good thing for the whole region."
While the record breaking sale adds another chapter of unique achievement to the Smart families' farming story, Stuart Smart remained a little surprised at the huge level of interest it had generated.
He expressed gratitude to the Ray White Rural WA team in getting the sale finalised after what had been a seven month journey for him and his family.
"They have been fantastic throughout the whole experience right up to settlement on Friday afternoon," Mr Smart said.
"I wish the new owners well and hope they will carry on the good work and good farming practices we have put in place over three generations.
"My grandfather, my dad and I all put our hearts and souls into this property, into our local farming region and to the Mingenew community.
"Obviously I would love to see that involvement continue with the new owners and to see the property continue to produce as we have set it up to do."
Mr Smart said while he would be leaving Erregulla Plains and did not see himself running a farm again he would definitely not be leaving agriculture.
"Cherie and I will continue to live in the country and remain involved as co-owners of the Stiletto Seeding Systems business look at new agricultural opportunities and ventures.
"And I am looking forward to working with and helping out a few other farmers around the place who have approached me, which I will enjoy."
The Smart family will leave a strong legacy imprinted on the WA agriculture industry, which was sown by Sir Eric Smart when he came to WA to share-farm in the mid-1920s and later purchased land at the current Mingenew property.
Sir Eric has been remembered as revolutionising the use of blue lupins to improve sandy soils, pioneering aerial spraying of crop bugs, as well as achieving grain and wool production records in the 1950s and 60s.
His son Peter followed in Sir Eric's footsteps, by continuing to improve and grow the farming business while also being involved in industry trials and having community commitments.
Peter died suddenly when his son Stuart was just 16, but Stuart continued on with the family farming business, eliciting the same passion for the industry that his father and grandfather had.
With the innovative gene running strong, Mr Smart was an early adopter of mouldboard ploughing and with his Stiletto Seeding Systems business partner Mark Dawson, designed the revolutionary boot to ensure minimal seed loss from chemical impact.
It's generations of the Smart's progressive thinking that the buyer Daybreak Cropping is set to benefit from.
Daybreak Cropping chief executive officer Will Heath said Erregulla Plains was a quality addition to the company's portfolio.
"Daybreak is pleased to have an asset of Erregulla Plains' quality in the portfolio," Mr Heath said.
"It's scale, efficiencies, stage of development and proximity to the port of Geraldton make it a highly attractive asset.
"In addition, it is our first asset in the Northern Wheatbelt of WA and therefore provides important diversification benefits for the business.
"We look forward to continuing the responsible stewardship of the asset and contributing positively to the Mingenew community."
Daybreak Croppings' other WA properties include Bodallin Farms, Bodallin, of 12,570 arable hectares and Waddikee Farms, Ravensthorpe, of 6500 arable hectares.
Bodallin Farms was purchased by Daybreak Cropping for $8.03m in April 2019, through Elders rural real estate specialist Will Morris.
The company also owns farmland in Queensland, New South Wales and Victoria, with its total assets, including Erregulla Plains, being about 75,000ha of cropping land.
Established in 2016, Daybreak Cropping focuses on acquiring broadacre farms, employing local expertise to operate them and improving the farms' productivity by investing in technology, soil amelioration and supporting infrastructure.
Daybreak Cropping is managed by WAM, which has other agricultural businesses including Warakirri Cropping, Aurora Dairies and a Diversified Agriculture Fund.
Warakirri Cropping comprises 80,000ha across 10 properties in WA, Queensland, NSW, Victoria and South Australia.
It's WA assets include Lobethal, near Beaumont, of 13,600ha and Mawarra, around Merredin, spanning 10,950ha.
Aurora Diaries claims to be one ofAustralia's largest milk producers with 11 farms covering more than 4600ha throughout SA and Victoria.
Daybreak Cropping's other parent investor, PSP already has various high-value land and water investments in Australia.
In December last year, it was reported PSP paid $490m for 89,085 megalitres of high security water in the lower Murray Darling Basin, as well as 12,000ha of Victorian almond orchards.
Also in 2019, PSP bought the 48,700ha NSW grain cropping, logistics and piggery business, BFB, reportedly for $208m.
This story Massive farm sale makes WA history first appeared on Farm Weekly.