Canadians swoop on Costa family's grain powerhouse
An agricultural fund backed by Canada’s largest pension investment manager has swooped on the Costa family’s Yarrabee Park grain growing aggregation in the NSW Riverina in a deal valued at more than $60 million.
It’s the eighth acquisition by Daybreak Cropping, which is a joint venture between local agricultural specialist Warakirri Asset Management and Canada’s Public Sector Pension Investment Board – or PSP Investments – which manages $220 billion of assets on behalf of the pension plans of the Canadian Public Service, the Canadian Armed Forces, the Royal Canadian Mounted Police and the Reserve Force.
The acquisition of Yarrabee Park will expand the Daybreak Cropping portfolio to more than 85,000 hectares across eight large-scale aggregations in Queensland, NSW, Victoria and Western Australia.
The deal highlights the strong offshore institutional appetite for Australian agricultural assets, which are largely ignored by local superannuation funds.
It comes as the booming agricultural sector prepares to harvest a record $81 billion this financial year, a combination of bumper yields due to excellent seasonal conditions and the highest prices (in real terms) for Australian agricultural produce in 32 years.
Yarrabee Park was developed by agricultural investment manager goFARM, a joint venture between managing director Liam Lenaghan and Costa Asset Management, the private investment arm of the Costa family (founders of ASX-listed fruit and vegetable producer Costa Group).
One of southern Australia’s largest contiguous grain production assets, the 11,200-hectare property at Morundah, about 130 kilometres west of Wagga Wagga, supports a 10,000ha cropping enterprise that produces 37,500 tonnes of grain and fodder a year.
Mr Lenaghan declined to comment on the sale price, but said it had “well exceeded expectation”. Yarrabee Park was put up for sale in September with price expectations above $60 million.
goFARM is also selling the 6298-hectare Sandmount Farms portfolio in Victoria’s Murray Valley region with an asking price above $250 million.
Also in Victoria, the strong market conditions auger well for the sale of the Merriwa Pastoral Company’s 1484ha cropping enterprise at Normanville west of Kerang in the Mallee region.
Price expectations exceed $10 million for the three-property portfolio, which is being marketed by Colliers agents Duncan McCulloch and James Beer.
MPC was established in 1965 by Des and Margery Fenton following the amalgamation of a number of farms including a soldier settler block granted to Mr Fenton after he returned from service in the Second World War.
Management of the farm was later handed down to their eldest daughter Bronwyn Hunt, who returned from England in 1977 to help run the property with her husband Geoff.
Des Fenton died young in 1981 while Margery stayed on the farm until her death in 2014.
The Hunts grew wheat, barley, oats, canola, field peas, lentils and chickpeas, drawing on their scientific backgrounds to ensure the farm survived during drought periods and was profitable over many decades.
When none of their three children could see a career on the farm (son James is professor of Agronomy and Crop Science at Melbourne University), the Hunts decided to lease out the farm after the 2019 harvest and retire.
Mr McCullough said the scale of the MPC portfolio would be attractive to both family farming groups and corporate investors.
“Dryland cropping properties in Victoria, and particularly the Mallee region, are highly sought after in the current climate,” he said.
Also in Victoria, but much closer to Melbourne, farmers Nanette and Morrie Griffiths have put their 160ha property at 260 Shanahans Road in Mount Cottrell up for sale as a future land banking opportunity.
The property, which includes a five-bedroom house and is just 10 kilometres from the Tarneit train station in Melbourne’s western growth corridor, is expected to sell for more than $15 million. Nick Myer and Sam Jeffery from Elders are handling the sale.
