goFARM and Laguna Bay list cropping assets in NSW and VIC

A busy selling season for institutional-grade farmland continues in Australia as two more fund managers look to secure a return amid record-high valuations.

Fund managers goFARM Asset Management and Laguna Bay Pastoral Company have separately listed significant cropping assets for sale, as a hot property market in Australia shows little sign of cooling down.

goFARM is selling Yarrabee Park, a dryland and irrigated cropping asset in the southern Riverina region of New South Wales. The 11,260ha is described by the firm as “one of the largest contiguous broadacre cropping assets” in the area.

In 2020, Yarrabee Park produced approximately 37,500 tons of grain and fodder, with 2021 forecasts putting it on track to exceed that total this year. The land is also home to a proposal for a large-scale 900MW solar farm of 2,600ha, which is forecast to generate A$3 million ($2.2 million; €1.9 million) per annum for 30 years for its new owners.

When asked why the asset had been listed for sale, goFARM Asset Management managing director Liam Lenaghan told Agri Investor: “The decision is motivated by several factors, but principally goFARM’s purpose is to transform agricultural assets, and after seven years of executing against the development plan, Yarrabee Park is now the showpiece ‘grain factory’ we set out to deliver.

“This, combined with unsolicited purchase enquiries in recent months, has resulted in our decision to offer the property to the market.

“The quality, scale and optionality of Yarrabee Park makes it a rare asset, and as such, if it sells, it will be sad to see it go. It will, however, release capital to allow further investment across a number of other farmland developments in the pipeline.”

A market source indicated that the value of the asset was likely to be in excess of A$60 million.

Another seller is Queensland-headquartered Laguna Bay Pastoral Company, which has listed the Woorndoo Aggregation in Victoria’s Western District region. This is held by its Laguna Bay Agricultural Fund I, a vehicle backed by the Washington State Investment Board and other investors, which closed in 2016 on approximately A$300 million.

Comprising around 3,353ha across three contiguous hubs within a 6km radius of each other, the Woorndoo dryland cropping asset is suited to various intensive and broadacre cropping strategies, including high-yield crops such as winter cereals and oilseeds.

The asset is being offered in its entirety or as three separate properties, and is expected to fetch more than A$70 million for Laguna Bay, according to a market source.

In 2020, the firm sold the 8,200ha Banongill Station in Victoria, 50km from Woorndoo, to a local farming consortium for approximately A$80 million, in the first asset sale from Laguna Bay Agricultural Fund I.

Mark Barber, head of agribusiness investment services for real estate agent Elders, which is managing the sale process of Yarrabee Park and working alongside agent LAWD to sell Woorndoo, said the listing of Yarrabee Park reflects the maturity of Australia’s agricultural investment landscape.

“Yarrabee Park is a turn-key operation offering an established farming enterprise with immediate returns and significant further development potential including tree crops,” he said in a statement.

“Australian agriculture has reached a point where assets of this calibre and scale are able to be offered to a market that is experiencing significant liquidity at this level. Institutional investors know they can invest in assets such as Yarrabee Park and exit at their choosing, knowing there is an expanding pool of capital looking to deploy in the sector.”