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Good time to sell, US investors cash in last Aussie farms

A US investment farm was encouraged by the sale of its cropping country in western Victoria to sell three big farm aggregations across Tasmania, NSW and Queensland. (Photo: LAWD)
Farm Online | 21 March 2022

Good time to sell, US investors cash in last Aussie farms

by Chris McLennan
 
Fresh from making $360 million from the sale of its Corinella farms, a US investment company has put another $400 million of Australian farm and water assets on the market.
 
Proterra Investment Partners is selling three portfolios of its agricultural assets, Vaucluse (4448 hectares) in Tasmania, One Tree (23,594ha) in Queensland and NSW as well as Racecourse (14,425ha) in Queensland.
 
These are the last remaining agricultural properties held in Australia by the US private equity firm.
 
These new farm aggregations include grain, sugarcane, horticulture and livestock production across Tasmania, NSW and Queensland.
 
Late last year, the company successfully sold its 22,500ha Corinella Group comprising mostly grain growing operations in western Victoria, the Wimmera and South Australia.
 
In that sale by LAWD, 49 properties were sold to 27 groups.
 
With this current sale, LAWD senior director Danny Thomas said he expected the diversity of the three big farm offerings to attract local and international interest at a time of "unprecedented demand for farmland".
 
"Proterra has done an outstanding job to strategically aggregate land and water assets and to transition these into highly productive aggregations, now representing more than $400 million in value, across wide-ranging geographical areas and commodities," Mr Thomas said.
 
Proterra managing director Becs Willson said the successful Corinella sale had led to the decision to bring forward Proterra's 10-year exit strategy from Australian farm assets.
 
"It is a great time to capitalise on the existing strong market while there is insatiable appetite from investors who want to enter or expand in the agriculture space," Ms Willson said.
 
She said the "short-term nature" of their investment fund combined with high commodity prices presented an opportunity to provide "strong returns to our investors".
 
Vaucluse
 
Vaucluse is the amalgamation of two neighbouring properties in Tasmania's Midlands , transformed to feature extensively developed irrigation land, including centre pivot and linear irrigation (2151ha) and hard hose traveller irrigators (447ha), with the balance made up of dryland cropping and grazing land.
 
Ms Willson said Proterra had developed Vaucluse to be one of the state's largest grain producers.
 
"Operating a five-year crop rotation across the farm, we have established Vaucluse as a high-calibre, large-scale cereal producer to benefit from strong demand from the Tasmanian livestock and aquaculture industries in an operating environment where there is limited local production," Ms Willson said.
 
"By investing heavily in water infrastructure and agronomics, we have significantly improved yields, while the construction of a 5424 tonne grain storage facility has further allowed us to extract a premium price by holding grain on behalf of customers and delivering throughout the year to guarantee a consistent high-quality product."
 
Other rotation crops, include potatoes, poppies, carrots and hemp.
 
The property is home to historical buildings, offices, and modern agricultural infrastructure, including 10-bedroom Vaucluse Homestead, and a circa 1832 five-bedroom Glen Esk Homestead.
 
Vaucluse also has substantial water entitlements of 15,273 megalitres with 9000ML capacity water storages.
 
Expression of interests in Vaucluse close April 28.
 
One Tree
 
One Tree combines 21 individual holdings across major production zones including Goondiwindi and Jandowae in Queensland, as well as North Star in NSW to create a 23,594ha cropping asset.
 
With self-mulching black brigalow soils, the One Tree group of properties produces high-yielding wheat, barley, chickpeas, fava beans, cotton and sorghum.
 
Mr Thomas said the portfolio would appeal to a range of buyers, including local farming families looking to expand.
 
"The scale and geographic spread offered by One Tree is very special, with a lot of time and effort having been spent strategically aggregating land and water to create this A-grade institutional portfolio.
 
"While, One Tree has been developed with an institutional buyer in mind, we are expecting strong bids from farming families, and can accommodate multiple transactions in this deal, as we did with Corinella Farms, if required," he said.
 
Ms Willson said Proterra had converted much of the land from grazing to cropping.
 
More than 48,000t of combined grain storage has been added across the portfolio.
 
Expression of interests close on May 5.
 
Racecourse
 
Racecourse spans three aggregations totalling 14,425ha in the Clairview and Mackay regions of Queensland which mostly large-scale irrigated and dryland sugarcane and beef producers.
 
Ms Willson said since buying the Mackay region's largest continuous use sugarcane farm in 2013, Proterra had since built the Racecourse portfolio through acquisition of cattle properties for conversion back to sugarcane production.
 
"We're very proud of what we have achieved with Racecourse. We have employed sophisticated agronomic methods and best industry practice across the portfolio to become one of the largest private producers of sugarcane in Australia," she said.
 
"Additionally, the portfolio was one of the first in Australia to achieve a globally distinguished Bonsucro accreditation, which recognises enterprises operating to stringent sustainable sugarcane production practices."
 
Water is the key to this portfolio with big water entitlements, delivered through extensive flood, centre pivot and lateral move irrigation infrastructure.
 
There is up to 2140ML of on-farm storage.
 
Racecourse is positioned close to major commodity processing facilities and ports, including sugar mills at Sarina (Plane Creek Sugar Mill), Proserpine (Wilmar Sugar), Farleigh, Marian and Mackay (Mackay Sugar) at the Mackay Harbour.
 
LAWD senior director Danny Thomas.
 LAWD senior director Danny Thomas.
 
Mr Thomas said there was the opportunity to convert the portfolio to high-value permanent crops like nut crops.
 
"Racecourse has undergone significant investment in developing the land beyond grazing pastures, and there is a natural evolution in that region from sugarcane into macadamia production," he said.
 
Expression of interests close May 5.
 
Proterra said it would look for other opportunities in Australia to transform agricultural operations.
 
"We believe we have a unique approach in this asset class in terms of our operating models, including equity partnerships with local growers to help build and grow these businesses from the ground up," Ms Willson said.
 
For more information on all these properties contact Danny Thomas on 0439 349 977 or Elizabeth Doyle on 0400 102 439.

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