Macquarie Infrastructure and Real Assets has placed one of its largest cropping portfolios, Lawson Grains, up for sale, in what is one of the biggest single portfolios of such properties to ever hit the market in Australia.
The Lawson Grains portfolio is owned by investors in the Macquarie Crop Partners fund, which is managed by MIRA.
Agri Investor understands that the Macquarie Crop Partners fund is approaching the end of its 10-year term, which is the primary reason for the sale.
A source familiar with the portfolio told Agri Investor that it had performed well during recent periods of drought and challenging weather conditions in both the eastern and western states which, when coupled with a positive outlook for grains and strong capital growth over the life of the fund, placed the portfolio in a strong position for a sale.
MIRA declined to comment on the sale or the reasons behind it.
Lawson Grains, headquartered in Albury, New South Wales, was established in 2010 and first began purchasing properties in 2011. It eventually acquired more than 70 farms which it then amalgamated into 10 aggregations, four in NSW and six in Western Australia.
The portfolio covers 103,006 ha in total, of which 89,548 ha are arable. It produced 251,364 tonnes of grain in 2020, equivalent to just over 0.5 percent of total Australian production that year.
The NSW properties are the Kealandi aggregation near Moree, the Uah aggregation near Forbes, and the Grassmere and Borambil aggregations, both in southern NSW.
In WA, the properties listed are the Walyoo, Wongan and St Leonards aggregations in the northern Wheatbelt region, as well as the Jerry South, Gunnedoo and Hakea aggregations in WA’s south.
Institutional interest expected
The properties will generate large amounts of interest among institutional buyers and other corporate farming groups. All will have seen significant uplifts in value, with some acquired near the beginning of the fund’s life potentially set to trade for double their acquisition value, on a per hectare basis.
“I’d be very surprised if Macquarie doesn’t end up achieving its target returns and this is likely to be very good for the investors,” one market source said.
Another source speculated that the portfolio might be too large for one buyer to take out in its entirety, as proved to be the case with the recent sell-down of properties from Consolidated Pastoral Company.
They said that while portfolio break-ups are not usually Macquarie’s preferred approach, recent sales from its Paraway Pastoral Company might show a willingness to take this route if it produces more value and certainty for investors.
The source familiar with the portfolio said that Lawson Grains was an “exceptionally well-integrated” business, and that MIRA was confident that the market was deep enough in Australia to find a buyer for the whole portfolio, but that the sale campaign would allow interested buyers to participate at the level they felt comfortable with.
The entire portfolio is up for sale via a two-stage expression of interest campaign, managed by LAWD.
The portfolio is being offered in its entirety as a going concern or as separate assets, with the first round closing on April 22, and is certain to attract institutional interest as one of the largest portfolios of cropping properties ever to come to market at once in Australia. The campaign begins formally on March 15.
LAWD recently expanded its agriculture real estate agency capabilities with the appointments of Danny Thomas and Col Medway, formerly of CBRE Agribusiness, and John McKillop, who was CEO of Qatar Investment Authority’s Hassad Australia and oversaw the sale of that portfolio in 2018, much of it to MIRA.