Deals

Foreign-backed miner buys 41,500ha Australian aggregation

Denham’s Pembroke has acquired three giant cattle stations from Peabody just a week after the 15,000 Gundaline estate was sold to Dutch-based Optifarm.

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An Australian extractive firm has bought a 41,500 rural aggregation in Queensland for a reported A$50 million ($39 million; €31 million).

The acquirer for the Iffley, Deveril and Twenty Mile properties was not disclosed but it is understood to be Pembroke Resources, a Sydney-based group backed by private equity house Denham Capital. The assets already belonged to a heavyweight of the industry: US coal miner Peabody Energy.

“Marking the first major agricultural transaction of 2018, the sale of these well-known Central Queensland properties is a strong indication that the state’s mining sector is picking up,” said CBRE’s Chris Holgar, who ran the 12-month sale alongside Geoff Warriner.

“The properties were purchased for mining purposes,” he added, but the fact that Pembroke trumped offers from both domestic and foreign bidders demonstrated investors’ interest for “high-quality agricultural assets.”

Peabody, which had purchased the three farms about a decade ago from the Acton Cattle Company, then found it difficult to develop coal deposits on the land after energy prices collapsed. The company was thought to be aiming for A$60 million in proceeds from the sale.

The news comes just a week after one of Australia’s most eagerly awaited ag auctions reached its conclusion. Gundaline Station, a 15,000-hectare property owned by Blue Sky Alternative Investments, Dutch pension ABP and Singapore’s Duxton – via local asset manager Southern Agricultural resources – was put on the block last October.

Blue Sky announced the sale via a filing with the Australian stock exchange last week, days after coming under heavy fire by Californian short-seller Glaucus for “wildly exaggerating” asset values.

The asset’s new owners were not disclosed but it has since emerged that these comprise Optifarm, a Dutch group backed by high-net-worth investors. Gundaline, one of the largest cotton farms in New South Wales’ Murrumbidgee Valley, is endowed with 16,000 megalitres of groundwater and around 17,000 megalitres of on-farm water storage.

The sellers were hoping to reap more than A$65 million from the sale, a target they reportedly met. CBRE, Peabody and Pembroke had not responded to requests for comment at the time of publication. Optifarm could not be reached for comment.