Farmers splash $440m to reclaim land from offshore investors
The expansive Corinella Group portfolio has sold for $370m.
Consortiums of Aussie farmers have stumped up an eye-watering $440m to reclaim a massive 25,741ha of cropping land from overseas investors across two mega deals the past month.
In the biggest deal, 27 groups joined forces to offer a combined $370m for 22,386ha along the South Australian and Victorian border.
The massive holding named the Corinella Group portfolio had been owned by US-based Proterra Investment Partners.
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Land Agribusiness Water Development’s Danny Thomas said while there was a “little bit of institutional investment”, most of the buyers in two syndicates that snapped up the farms on either side of the border had been owners of nearby or adjoining properties.
“The locals have got strong balance sheets and to buy something nearby or adjoining they are going to pay more than institutional investors,” Mr Thomas said.
“They are chasing scale and (some) have been chasing it since they were given the land in the early 1900s. These are generational farmers.”
The sprawling portfolio is geared towards cropping operations.
Most would be trying to reach the 5000ha sweet spot, the minimum needed to make cropping infrastructure became as efficient as possible with modern farming techniques, he said.
The agribusiness operators, some whose families have been working the land for more than a century, have reaped reward from a mix of low interest rates, exceptional growing seasons in recent years and strong commodities prices.
And it’s likely the properties will stay in Australian hands for a long time.
“These are multigenerational decisions to build their business,” Mr Thomas said.
“These assets won’t come back into the market.”
Some tranches of the land were also incredibly scenic.
Meanwhile the recent sale for a Woorndoo property spanning 3355ha near Lake Bolac soared to $70m when two farmers with holdings near the area made a play for the properties.
They had been owned by US firm Laguna Bay Agricultural Fund.
Mr Thomas said his team had sold $1.2bn in Australian farmland in recent months and, with billions more in sales handled by others, 2021 had been a big year for the sector.
“In the southwest of Victoria and the southeast of South Australia there’s been more than $500bn of land sold just in quarter four,” Mr Thomas said.
The Woorndoo property sold for a hefty $70m.
While it wasn’t unusual to see more than $1bn of agricultural land change hands in a year, “the number of billions this year has been unusual”, he added.
“To get things sold over $50m used to be very hard,” Mr Thomas said.
“But it doesn’t matter in this market whether you want to sell a $1m farm or a $1bn agricultural portfolio, this market will absorb it. Everyone in the world wants to buy.”
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