The sale of Joanna Plains – an Australian rural property that until now has supported a vertically-integrated meat business – would unlock more than 9,000 hectares of “premium rural land,” CBRE, the real estate firm hired to manage the sale, said in a statement.
The property, located 163km north of Perth at Cataby, comprises a 6, 679 hectares of rural property developed for cropping, grazing and feedlotting and an additional 2,670 hectares of leased land which may be assigned to the purchaser.
“The cropping really revolves around animal production of beef cattle, which is predominantly Angus,” Phil Melville, CBRE’s associate director of agribusiness and one of the two agents handling the sale, told Agri Investor. The main crops that are cultivated are wheat and oats, but the property also has a fair proportion of perennial pastures, Melville added.
The property also includes a semi-complete abattoir and a 460-meter bore calculated to produce 100 liters of water per second and a drawdown of just 58 meters.
“You can irrigate extensively,” Melville noted. “It’s good quality water but it’s shallow, so your pumping costs are extremely low, which is very competitive.”
Within a week of advertising the sale, CBRE has received inquiries from multiple parties, Melville explained, some of whom are looking to complete the abattoir to their specifications, while others are interested in the property’s water resource for irrigation.
Comprising four separate titles, the property can be sold either in its entirety or in segments.
“We’ve been appointed by the receiver [David Young] to seek expressions of interest,” Melville said. “Preferably, we’d like it as one transaction, but we’re under instructions to return the highest yield for the sale.”
Access to the Dampier to Bunbury gas pipeline is another attractive feature, providing the potential for a cheap energy source. “When you go to value-adding or processing agricultural commodities, you consume power. So, the cheaper your costs, the more profitable your operation in general,” Melville said.
Another potential use for part of the property is generating wind power, an option that was considered in the past. “Because the property has the main electricity grid running through it, a wind farm is a real possibility,” CBRE’s associate director said.
Asked whether the interest expressed so far has been domestic or foreign, Melville responded that it’s a cross-section: Australian investors using international funds.
“In Australia, we have Andrew Forrest, Gina Rinehart, Kerry Stokes as well as some very large family corporates. I’m not saying that they’re going to end up with it, but it’s pretty safe to say that anyone who is in the beef production industry is going to run the ruler over this.”
While Melville declined to specify a price range for the property, Joanna Plains was reportedly on the market previously for approximately A$30 million ($22.3 million; €19.9 million).