MIRA’s Lawson Grains sale another sign of Australian ag’s maturity

A huge cropping portfolio has hit the market in Australia, which will provide an indication of the true level of institutional appetite for farmland.

The big story in Australian agriculture last week was the news that Macquarie Infrastructure and Real Assets had put its Lawson Grains business up for sale.

Lawson Grains is a significant business, comprising 10 aggregations that MIRA has put together from more than 70 individual farms over the past 10 years.

Its grain production last year accounted for around 0.5 percent of Australia’s total output overall and the listing represents what is one of the largest single portfolios of cropping properties ever to hit the market in Australia.

At first appearance, it seemed that MIRA was perhaps being opportunistic in listing Lawson Grains for sale, what with land prices high (and still with room to grow, if you believe some market observers) and tailwinds for agriculture still generally strong after a pandemic-hit year proved the resilience of the asset class.

There will be some truth to that, in that this is indeed a good time to sell. But it’s also true that the Macquarie Crop Partners fund, the investors in which ultimately own the portfolio, has reached the end of its 10-year term.

The fund was established just over a decade ago to invest in a diversified portfolio of cropping properties and, as a source familiar with that effort told Agri Investor last week, it has been pretty successful in doing so.

While also owning properties in South America, Macquarie Crop Partners’ Lawson Grains portfolio performed strongly as a collective during the past couple of years, disrupted as they were by drought and covid-19.

And it seems clear that much of the land MIRA purchased for this portfolio, especially in parts of Western Australia, will have appreciated in value considerably over the past decade, to the point where investors will be getting a very healthy return if expectations for the sale are met, with some assets predicted to have doubled in value on a per hectare basis.

With Gina Rinehart also choosing to list a significant portfolio of cattle properties recently, and other major assets such as Auscott hitting the market last year, it’s clear that the scale of opportunities in Australian agriculture is as big as it has ever been.

The source familiar with Lawson Grains said: “I see this as further evidence of how much Australian agriculture, as an investment asset class, has matured.

“Investors who participated in that fund 10 years ago are set to divest from those assets and receive a healthy return on their investment, which is a good advert for what institutional fund managers can achieve.”

Investors will be very interested in the Lawson Grains portfolio, whether whole or in parts, and we will be watching with interest to see where it ends up.