Global AgInvesting | 2 August 2022
Aware Super sells Lake Boga farming portfolio to goFARM for approximately AU$30M
by Lynda Kiernan-Stone, Global AgInvesting Media
It was back in September 2021 that Australia’s Aware Super let it be known that it was taking steps to divest its 9,000-plus hectare Lake boga farming portfolio – an aggregation that had been part of a 15-year management partnership with Kilter Rural to regenerate the land and deliver environmental, commercial, and social benefits.
In action since 1992, and formerly known as First State Super, the fund changed its name to Aware Super in September 2020. Today, Aware Super is one of Australia’s largest funds, merging with VicSuper and WA Super in 2020 to now manage AU$155 billion (US$107.6 billion) for more than 1 million members across the country by investing in assets that build a more sustainable economy, support employment, and improve communities.
Comprising 38 organic, traditional, horticultural, and broadacre cropping farms, the Lake Boga assets are situated between Lake Boga and Kerang in northern Victoria. Within the portfolio are 3,600 hectares under irrigation, Victoria’s largest field tomato grower, a commercial-scale Queen Garnet plum orchard, a sheep grazing operation, winter cereal acreage, committed biodiversity zones that bring opportunities for future carbon offsets, and 20,000 megaliters of Goulburn-Murray Irrigation District water entitlements.
When first acquired, Cullen Gunn, CEO of Kilter Rural, noted that 95 percent of the land had been subject to inefficient irrigation practices, which negatively impacted soil productivity, water quality, and biodiversity.
“When we first purchased this land, our intention was to acquire under-scaled and underutilized land, invest in world leading soil remediation and irrigation infrastructure, and eventually exit a profitable farming operation with a bright, long-term future,” said Gunn. “We believe we have more than achieved that goal.”
Over the course of the past 16 years under Kilter Rural management, Boga Lake’s farmland has been transformed into a highly sustainable business with rehabilitated environmental assets, according to Gunn, who added that the high-value crops, market-leading irrigation, and long-term potential make this an attractive opportunity for new investors.
Improvements include the planting of 190,000 seedlings, and 690 hectares (1,705 acres) of direct seeding for environmental forestry and enhanced biodiversity. Rehabilitation efforts have also seen the restoration of the Winlaton Depression – a significant local environmental asset.
Mark Hector, senior portfolio manager of infrastructure and real assets for Aware Super, commented that after 16 years it was time for new investors to step in to support the long-term prosperity of these assets.
“We’re really proud of what we accomplished with this investment over the 16 years it was owned by VicSuper and then Aware Super, after the funds merged in 2020,” said Hector. “It was always our intention to divest the farmland after a period of transformation and growth, and to redeploy the capital into exciting new investment opportunities that will keep delivering the strong, long term returns our members expect.”
That new investor stepping up is goFARM. Founded in 2013, goFARM is one of the largest agricultural investors and managers in Australia, with about A$1 billion (US$690 million) in AUM.
A self-labeled “high-conviction agricultural investor, developer, and manager”, goFARM focuses on high-growth agricultural assets with the potential to be transformed through land use change, asset reconfiguration, technology, sustainability, and investment in people.
Within this framework, goFARM’s current portfolio includes:
Sandamount Farms – 6,300 hectares (15,567 acres) in the upper Murray region of Victoria, acquired to create a strategic greenfield horticultural development land bank with secure surface and groundwater entitlements. With the climate and soil quality to support a range of crops, goFARM has rejuvenated the hoof-compacted soils through deep ripping and the application of manure and gypsum to create a 4,000-hectare horticultural footprint. Currently, large-scale almond and citrus developments are underway at this site.
Morrunhah Farms – 11,500 hectares (28,417 acres) in the Riverina region of Southern New South Wales that was initially a mixed farming operation of cropping and livestock. goFARM achieved scale here by aggregating Yarrabee Park and Gidgell Irrigation and by acquiring the “paper roads” throughout the property. With the addition of groundwater from Gidgell, significant investment in gypsum and lime to ameliorate the soils, the installation of infrastructure at the farm hub, and the reconfiguration of the land, goFARM stated that it has created a “productive, large-scale grain factory”.
Canally Almond Orchards – Originally nine dryland cropping farms totaling 10,000 hectares (24,710 acres) in Sunraysia, New South Wales, the Canally Aggregation began development in 2016 in partnership with US Agricultural Fund into a large-scale almond operation, that once complete in 2023, would be the third largest producer in the country. This aggregation is located at the junction of two of Australia’s largest irrigation rivers, and is one of the largest contiguous horticultural aggregations in Australia, with more than 60 percent of the soil being ideal for almond growing.
As part of the sale agreement for the Lake Boga portfolio, it has been agreed that the sale would include low-reliability water rights, with Aware Super retaining ownership of the high-reliability water rights previously part of the portfolio, and valued at approximately AU$100 million (US$69.45 million).
“We know the asset is in good hands with the new owner, who will continue to invest in the business and ensure it has a prosperous future,” said Hector. “Meanwhile, we’ll continue to invest in strong, sustainable agricultural assets that support regional Australia and deliver strong, long-term returns for our members.”