Macquarie gathers Queensland croplands in $120m deal
by Nick Lenaghan
Macquarie Asset Management is stepping up its investment in farmland, taking control of Cowal Agriculture, a central Queensland cropping enterprise affiliated with US-based Global Endowment Management, in a transaction worth as much as $120 million.
The transaction highlights the interest from institutional investors, local and foreign, in securing sizeable exposures to the Australian agricultural sector as world food markets are roiled by inflation and disrupted supply chains.
The Cowal aggregation, around Emerald, was once part of the former PrimeAg portfolio before it was sold to an entity linked to Global Endowment Management in 2013. The aggregation includes six farms stretching across nearly 6000 hectares.
The farms produce a range of crops, including cotton, sorghum, cereals, wheat, chickpeas and mung beans. A major feature of Cowal Agriculture is its access to water, allowing for widespread irrigation. Downstream from the Fairbairn Dam, the aggregation has more than half its land planted to irrigated row crops.
Its water entitlements include more than 27,000 megalitres of medium-priority water, while the properties have 12 kilometres of frontage to the Nogoa River.
Macquarie, which declined to comment on the transaction, has a track record in establishing large stakes in farmland. Three years ago, its asset management arm acquired a 49 per cent stake in the country’s largest cotton irrigator, Queensland’s famed Cubbie Station.
Macquarie Asset Management manages about 4.7 million hectares of farmland across Australia and Brazil in various managed funds.
The Cowal Agriculture transaction, brokered by LAWD’s Danny Thomas and Simon Cudmore, is the latest in a number of high-profile institutional-level deals in agriculture.
“We have been seeing farmers in some districts going head-to-head with institutions. In this case, there were only institutional interests. We could have sold it three or four times over,” Mr Thomas said, while declining to identify the ultimate buyer or price paid.
“There is a continuing flow of inbound capital looking for affordable, scalable agricultural opportunities. In a volatile world market, we still look like a very positive place to invest.”
Northern American institutional investors have proven particularly fond of Australian farmland, including Canada’s Public Sector Pension Investment Board, which last year backed the Hewitt organic cattle and sheep family in two acquisitions.
In March this year, Daybreak Cropping, an agricultural fund jointly backed by PSPIB and local player Warakirri Asset Management, swooped on the Costa family’s Yarrabee Park grain-growing aggregation in the NSW Riverina in a deal valued at more than $60 million.