Rushy Lagoon, Tasmania’s largest farm, has already attracted interest from a broad range of potential bidders only days after it came on the market.
The public auction process for the 21,861-hectare asset, which encompasses four dairies, officially started earlier this week. Peter Ryan, an independent consultant for CBRE, which is running the sale, said the firm had received interest from “quite a large deal of well-credentialed candidates interested in receiving further information and in some cases, looking to inspect the property.”
Among them are Australian and New Zealand specialized agriculture fund managers, as well as Australian farming families and high-net-worth individuals looking to build their portfolios, Ryan said. When asked if North American institutions featured among would-be bidders, he said some were indirectly exposed as shareholders in farm management firms and farming funds that are looking at the asset. He also noted some early-stage interest from Chinese investors.
Ryan remarked that CBRE has not yet received any formal expression of interest, which have to be submitted by April 23.
No cooling down
New Zealand’s Allan Pye, Rushy Lagoon’s owner, is looking to sell the farm for more than A$65 million (€51 million; €42 million), sources told Agri Investor last week. He purchased the asset in 1997 for A$8.2 million, expanding it over time through the 7,000-heactare acquisitions of two adjacent properties.
Pye, who is in his 70s, is looking to sell Rushy Lagoon at a time of significant appetite for Tasmanian farming in general and dairy assets in particular. He is seeking to rationalize his portfolio, which also includes dairy and horticultural farms in his native land, Ryan noted. “Mr Pye has decided to sell Rushy Lagoon as part of a program to consolidate his agricultural assets into a more focused and manageable portfolio.”
Ryan observed that more stringent regulations introduced at the beginning of the month, which require all property bringing a foreign investor’s Australian farmland holdings to more than A$15 million be advertised for sale for a minimum of 30 days, had had no impact on the Rushy Lagoon process, since the auction was going to be public anyway.
Yet Ryan reckoned the wider market would “take a little time to adjust” to the new rules. In recent years, several large off-market transactions have occurred – most often after offshore buyers approached Australian owners directly to reach a deal that suited both parties, he said. Some sellers, deterred from openly marketing their properties, could now decide to withhold them from the market.
However, “after a period of time, the market will adjust to the new regulation and life will go on,” Ryan argued. He said he’d noticed no slowdown in new properties coming on the block since the beginning of the month. “There might be a slight breeze, but the market is still hot.”