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International buyers enjoying low Aussie dollar to snap up stations and farmland

The Property Tribune | 25 January 2023
 
International buyers enjoying low Aussie dollar to snap up stations and farmland
 
by Anna Warwick
 
With favourable global economic conditions, including current high commodity prices, and with Australia’s exchange rate at sub USD 0.70, big properties around Australia are changing hands with overseas investors buying in.
 
After 155-years in the hands of one family, Walcha’s iconic Emu Creek NSW is now listed for sale through LAWD by Expressions of Interest. One of Australia’s largest irrigated cotton farming operations, Gundaline, at Carrathool in the Murrumbidgee Irrigation area of NSW, has sold to one of Asia’s largest clothing manufacturers and exporters, Jinsheng Textiles. WA property developer Julian Walter has sold his mixed-farming operation Cherylton Farms for a record $100 million to Excel Farms, a Victorian business led by Nick Paterson and backed by Canadian investor Fiera Comox Partners.
 
With even smaller buyers from USA and Canada accessing their superannuation and pension funds, there are spotters travelling the country looking for opportunities, said expert Merino farm consultant John Crosby.
 
“For overseas investors with a super fund, there is a limit to the number of shopping centres and government bonds they can buy. But farm land can be leased back to a recognised farming enterprise for a competitive five per cent return. That’s better than any shares. The fact that Australia’s farmlands have gone up in value and escalated in price again after several freakishly good seasons and with strong commodity prices, is a bonus for these investors” he said.
 
Emu Creek Station the market for first time in 155 years
 
Located 13 kilometres from Walcha, NSW, Emu Creek was originally purchased in 1868 for one pound per acre. The property is now 3,026 hectares and, over six generations, has been developed from a superfine wool growing enterprise, into a thriving livestock breeding and fattening operation.
 
Emu Creek ranges from gently sloping alluvial creek flats to undulating low grazing hills and timbered ridgelines. Today, the grand 1908 homestead sits among the magnificent and meticulously maintained five-acre garden.
 
The sale is expected to fall within the mid-$30 million range, reflecting the station’s position in the sought-after and high rainfall Walcha grazing district, widely acclaimed for its consistently high production.
 
The holding has the capacity to maintain 25,000 Dry Stock Equivants (DSE) and is currently conservatively stocked with a mixture of late spring calving cows, replacement heifers and Dorper ewes lambing on a nine-month cycle.
 
Vendors Mark and Angie Berry, who are fifth generation on the property, have chosen to sell as part of their future business plan.
 
Mrs Berry said, “Emu Creek has been a wonderful home to all of us over the generations, and it has been an enormous privilege to be the custodian of this beautiful property.”
 
LAWD Senior Director Col Medway said the property, rich in history, posed a significant development opportunity and would attract interest from parties in search of a premium grazing asset.
 
“An extensive soil testing program was undertaken by the current owners in December 2022 with the results demonstrating the soils are well-suited to a range of grazing enterprises on improved pastures and opportunistic cropping,” Medway said.
 
“During their time, the Berry family has also invested in improving pasture and developing the water infrastructure on the site.”
 
More than 700 hectares of perennial grass and clover pastures have been improved, while 1,369 hectares are open native grass and clover pastureland.
 
The property has strong water supply through a number of sources, due to 24km of frontage to Dog Trap Creek, Emu Creek and Brookmount Creek among others. Stock water is provided by a series of 28 dams, while six bores and a solar pump from Brookmount Creek deliver water to head tanks which gravity feed 37 strategically placed concrete troughs.
 
Mr Medway said, “Benefiting from an average of 700mm rainfall per annum, the property will suit any institutional investor or large farming family looking for scale and will cater for any mix of livestock production.
 
“There is also a significant opportunity for further development which will provide new owners with the ability to increase the operational scale of the property” he said.
 
One of Australia’s largest irrigated cotton farms sold
 
Gundaline station, at Carrathool in the Murrumbidgee Irrigation area of NSW, has been sold for around $120 million, to China’s Jinsheng Textiles, after strong interest from local and international buyers, Danny Thomas and Elizabeth Doyle from national property firm LAWD have confirmed.
 
Comprising approximately 14,916 hectares, Gundaline is a carbon neutral property which features 6,000 hectares of first-class flood irrigation land and secure access to surface and groundwater entitlements, as well as water storages in excess of 17,000 megalitres.
 
LAWD Senior Director, Danny Thomas, said “The location, property development, quality of infrastructure and water security makes Gundaline an A-Grade agricultural asset.”
 
The cotton operation on Gundaline will form part of Jinsheng Textiles’ long-term strategy to provide full transparency and traceability from field to garment for their customers, he said.
 
The property has undergone significant development since 2014, when Customised Farm Management took over management.
 
CFM’s Managing Director, Andrew Parkes, said the expansion of cotton growing area was matched by increased water storage capacity.
 
Parkes said, “When we took over, Gundaline had circa 2,800 hectares of flood irrigation in relatively small fields of around 60 hectares. Between 2014 and 2017, we developed around 3,200 hectares on a much bigger scale – between 180 and 250 hectares per paddock.
 
“Increased water storage capacity means that both summer and winter crops can be irrigated, which helps increase the carbon that is sequestered in the soil” he said.
 
Under CFM, Gundaline expanded from cotton to additional crops including soybeans, wheat, canola and fava beans, with yields increasing each year. A further 750 hectares has been identified as having potential for intensive horticulture development, such as pistachios or citrus.
 
“The majority of Gundaline is medium clay soil. We’ve done a lot of work over the years incorporating gypsum and manures to help the plants access a deeper soil profile, which also helps increase water use efficiency,” Mr Parkes said.
 
Mr Parkes said Jinsheng share CFM’s commitment to sustainable agriculture and supporting rural communities.
 
“Gundaline was one of the first properties to achieve carbon neutral accreditation for its cotton production, and the new owners are keen to continue that and ensure the carbon footprint of the property is kept under control,” he said.
 
“They’ve made a commitment to supporting local communities and rural life, as well as the current team of staff.”
 
WA’s Cherylton Farms sold for record $100 million
 
Owned by the Walter family, Cherylton Farms is based in the two key locations of Brookhampton Valley and Ryansbrook, south of Perth.
 
Julian Walter, owner of Country Builders, has sold his Brookhampton Valley mixed-farming operation Cherylton Farms to Excel Farms, a Victorian business led by Nick Paterson and backed by Canadian investor Fiera Comox Partners.
 
Originally owning a smaller parcel, 23 kilometres south-west of Kojonup in the picturesque and productive south-west region of Western Australia, Walter strategically purchased and developed neighbouring properties over 14 years, and then sold the amalgamated 8554-hectare property after being approached many times.
 
The enterprise mix includes broadacre cropping, Cherylton Angus, prime lamb, an extensive merino wool production system, orchards, a fruit packing operation and marron harvesting. Existing operations at Cherylton Farms, include diversified cropping and livestock grazing focus on the production of high-yielding crops such as barley, oats and wheat and canola, as well as Merino and composite sheep flocks.
 
Danny Thomas, a senior director with commercial agency LAWD, marketed the property with colleagues Simon Wilkinson and Erica Semmens, said “We experienced exceptionally high levels of participation from institutional investors in the sale process for Cherylton Farms.
 
“Any West Australian vendor looking to divest a high-quality, large-scale asset in the current market will see that asset met with very high demand” he said.
 
This demand is on the back of two seasons of record grain production in WA and input costs easing.
 
Cherylton’s new owners, Excel Farms, are a joint-venture business between Victoria’s Paterson family and Montreal-based private investment manager Fiera Comox. Mr Paterson’s mother Judy is Rupert Murdoch’s niece, who runs regional Victorian broadcaster Ace Radio with her husband.
 
In a performance report published in November, the Canadian $1 billion (AU $1.1 billion) Fiera Global Agriculture Fund said it was targeting a 35 per cent asset allocation in Australia but was at 26 per cent. It was also looking to boost its allocation in New Zealand from 7 per cent to 10 per cent.

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