US-headquartered non-profit organization The Nature Conservancy has partnered with Victoria-based Tiverton Agriculture to acquire two cattle stations in New South Wales in a move billed as one of the highest-value land-for-conservation deals in Australian history.
The joint venture paid A$55 million ($39 million; €35 million) for the Juanbung and Boyong cattle stations near Oxley, in NSW’s southern Riverina region, which together cover around 33,000 hectares and have 55 kilometers of frontage to the Murrumbidgee River. The purchase includes a 13,506ML supplementary water entitlement.
The properties have been sold by TRT Pastoral Group, owned by Melbourne-based investor Tim Roberts-Thompson.
The split in TNC’s JV with Tiverton was not disclosed, but TNC country manager Rich Gilmore told Agri Investor it was a “reasonably even” split in capital that had funded the purchase, accompanied by some debt financing from ANZ.
TNC was the “project proponent,” Gilmore said, having already owned a neighboring property and sensing a “once-in-a-generation opportunity” to expand its holding in the area. Tiverton then came on board with an equity stake but also to manage operation of the properties on behalf of the partnership.
“Tiverton has a really good track record around Australia and it was a good fit,” Gilmore said.
The stations have traditionally been used for backgrounding large numbers of cattle for nearby feedlots, up to 10,000 head of cattle per year.
Almost two-thirds of the properties are covered by the Great Cumbung Swamp, which the new owners have pledged to protect from irrigated cropping while continuing sustainable farming practices on the rest of the land to generate revenue.
“There’s a prevailing belief in land management, and in the Murray-Darling Basin in particular, that says it’s a binary choice between agricultural productivity and nature,” Gilmore said.
“That view is not only unhelpful, it’s unnecessary. We can grow food and fiber in balance with nature.”
Gilmore said that the JV will continue with the existing cattle operation and look to supplement it with other sources of revenue, which could potentially include eco-tourism, carbon sequestration and grant funding from the NSW government’s Biodiversity Conservation Act.
TNC has worked with Nari Nari Tribal Council on its existing property and the acquisition represents an opportunity to extend that relationship, he added.
The sale was conducted by CBRE with consultancy support from Aither.
“This acquisition is aligned with Aither’s vision to have a positive impact on the management of water resources,” partner Chris Olszak told Agri Investor.
Olszak said he expected to see more deals of this type in Australia. “There’s definitely been an increase in interest in impact investing and sustainability, so I don’t see why these kinds of deals won’t continue to happen,” he said. “There is a lot of support from banks and institutional investors for these kinds of deals.”
TNC has a global goal to raise and deploy US$1 billion of capital by 2020 but has already reached US$2 billion, exceeding its goal. Gilmore said Australia would be a “key market” for the non-profit in future.
“There is a good institutional sector, low sovereign risk and lots of domestic capital in Australia,” he said. “We’re likely to deploy in the hundreds of millions of dollars here, especially if we can mobilize institutional capital like superannuation funds.
“Investors who are looking for ways to deploy capital in agriculture should take this kind of opportunity seriously. It’s not just good for the environment, it’s good for business too. Institutional investors in particular should consider if this is a good way for invest in agriculture.”
Roberts-Thompson said the sale would allow TRT Pastoral to focus on building its King Island beef business that it purchased 12 months ago as well as its remaining operations on the Australian mainland.