Two of Queensland’s largest cotton-producing properties have been put on the block.
Eastern Australia Agriculture is selling its Kia Ora and Clyde properties in south-west Queensland, described as “large-scale, institutional-grade investments” by a source close to the process.
Both are generating interest from offshore buyers and domestic family farming groups, according to the source. CBRE, which is marketing the sales, declined to comment on the expected price or potential buyers.
Kia Ora covers 18,783 hectares, including approximately 8,898 hectares of highly developed flood irrigation and 902 hectares of dryland cultivation. The property is mostly used for a combination of irrigated and dryland cotton production and non-irrigated cropping including wheat, sorghum and chickpeas, with the potential to develop a further 3,525 hectares of arable land.
Clyde spans 18,418 hectares, including 3,904 hectares of flood irrigation, of which about 1,721 hectares has been developed to bankless channel. It has historically operated as a mixed irrigated and dryland cotton production and grain-growing enterprise.
Clyde also contains 7,743 hectares of arable land, currently used for grazing and support, that is steadily being developed to dryland cropping, and represents an opportunity for an investor with a business plan in mind for a large-scale asset, according to CBRE.
This is the fourth time Eastern Australia Agriculture has put the properties up for sale since it purchased them in 2008, paying A$68 million ($54 million; €43 million) for Kia Ora and A$21 million for Clyde.
EAA previously tried to sell the properties in 2013, 2014 and 2015 for values ranging from $150 million to $180 million, according to various reports.
It was also in talks in 2017 with Macquarie Group’s Lawson Grains to sell the two properties for approximately $130 million, but negotiations reportedly got stuck on price.
Kia Ora and Clyde are now being offered for sale on a ‘walk-in, walk-out’ basis, with Eastern Australia Agriculture open to a separate or combined sale.
Potential in reserve
On February 1 the Australian government introduced new rules on foreign investment in agriculture which requires sellers to market and advertise their property for a minimum of 30 days on “channels that Australian bidders could reasonably access,” in an attempt to ensure domestic bidders get a chance to participate in the sales process.
The new rules are not expected to impact the sale of Kia Ora and Clyde, according to a source.
“We expect Clyde to attract strong interest from both domestic and international buyers who recognise the opportunity to unlock the property’s greater potential,” said CBRE’s Danny Thomas, who has been appointed to market the property with Duncan McCulloch.
“The property is underpinned by outstanding soil types, which support high cotton and grain yields, as well as ‘best working practice’ operations and infrastructure.”
Both properties are close to the major rural township of St George in Queensland’s south west. Expressions of interest close on 12 April.