Gina Rinehart’s Hancock Agriculture and its joint venture partner S Kidman & Co have placed a “significant” portfolio of cattle stations in Western Australia and the Northern Territory up for sale.
The portfolio is one of the largest to come to market in recent years and is likely to attract significant interest from across the spectrum of buyers, Tom Russo of real estate agent Elders told Agri Investor, including private equity, institutional investors and other corporate buyers.
Agri Investor reported in November 2020 that several of Hancock’s properties in northern Australia would be listed for sale, which has now been confirmed by this listing.
The portfolio on offer comprises seven individual cattle stations covering 1.9 million hectares in total.
Russo said the sale has been structured in such a way as to allow prospective buyers to express interest in the entire portfolio, a single property, or “anything in between.”
“Price will be a key consideration, clearly, but there will also be considerations around execution and risk certainty,” he said, when asked how bids of different natures would be assessed.
On offer are the 147,510 ha Aroona Station, the 171,000 ha Willeroo Station (which neighbors Aroona), and the adjoining Riveren and Inverway stations that cover 555,400 ha, all in the Northern Territory.
In Western Australia, the properties for sale are the 203,143 ha Nerrima Station and the adjoining Ruby Plains and Sturt Creek stations that together cover 796,134 ha, as well as the Phoenix Park feedlot near Katherine, which has capacity to feed 20,000 head of cattle.
Elders declined to give any guidance on how much the portfolio could be expected to fetch in its entirety, but market sources told Agri Investor that it could be upwards of A$300 million ($232 million; €195 million).
The properties are currently carrying a herd of 108,000 head of cattle plus progeny, which are also up for sale.
“The cattle will attract just as much interest as the real estate potentially, because in the current market it’s so difficult to build a cattle herd quickly with breeder stock so difficult to obtain while the herd is rebuilding,” Russo said.
“This represents an opportunity for somebody to acquire a going concern at scale that you couldn’t replicate anywhere else in the market. Demand for these types of properties is genuinely very strong – you can argue we’re in a golden phase of the cycle where commodity prices are very high and producers are experiencing very good seasonal conditions.”
Russo said Hancock and S Kidman were selling because they saw an opportunity to “refine their portfolio” and that it was “by no means an exit from agricultural production” for the businesses and owner Gina Rinehart.
A Hancock spokesman said last year: “Given inter alia the significant improvements and value creation that has been achieved from these investments, the company will now look to divest several properties to focus on more agricultural and cattle opportunities.”
Elders will conduct the sale via an expression of interest campaign which has launched this month.
Hancock will retain ownership of 23 other cattle properties in its position as the second-largest producer of beef in Australia. The firm seems set to recycle capital raised through the portfolio sale into growing its growing wagyu beef production business as well as potentially expanding into other commodities.