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NZ Super Fund expands Australian beef investment

NZ Super Fund deployed more capital into its beef JV Palgrove and is open to further acquisitions.

New Zealand Super Fund has extended its exposure to Australian agriculture with the acquisition of a property in southern New South Wales, through its investment in beef stud and producer Palgrove.

Palgrove acquired Gilgal, a 3,619-hectare property near Wagga Wagga in NSW, for an undisclosed sum to take its portfolio to well over 20,000 hectares across six properties.

It is the company’s first property in the Riverina region, adding to other properties near Inverell and Glen Innes in the state’s Northern Tablelands. It also owns several stations in Queensland, its home state.

NZ Super Fund made its first foray into agriculture outside of its home country with its investment in Palgrove in 2017. The investment was valued at NZ$97 million ($62 million; €57 million) in the fund’s 2018-19 annual report.

A spokesman for the fund confirmed to Agri Investor that the Gilgal acquisition means NZ Super Fund has deployed further capital into Palgrove, but declined to disclose the amount.

The annual report showed that NZ Super Fund increased its stake by approximately 1 percent in the year to June 30, in each of three subsidiaries related to Palgrove: Palgrove Holdings, Palgrove Land Holdings Trust and Palgrove Pastoral Co.

The fund established NZSF Australian Rural Holdings Trust in 2017 as a managed investment trust with a stapled structure. The MIT acquires and holds units in Palgrove Land Holdings Trust, which in turn is a unit trust established to acquire and hold the land assets leased by Palgrove Pastoral Co.

It owns another subsidiary, NZSF Australian Rural Holdings Limited, that held a 50 percent stake in Palgrove Management at June 30, 2019, a company established to provide management services to Palgrove Pastoral Co.

On the possibility of further acquisitions, the spokesman added: “We remain open to future opportunities.”

Gilgal has been used in the past as a mixed farming enterprise running sheep and cattle alongside growing crops such as wheat, canola, barley, oats, annual ryegrass and lupins.

Inglis Rural Property, which sold the family-owned farm via an expression of interest campaign, marketed it as having a capacity of 34,000-38,000 dry-sheep equivalent in average seasons.

In a statement, Inglis Rural Property director Jamie Inglis said: “The property generated significant interest and we achieved a strong result after 22 inspections and 53 enquiries.

“The demand for mixing farming country in the South West Slopes is insatiable. We have seen versatile country selling from between A$800 and A$1,000 per dse [dry sheep equivalent].”

Inglis sales manager Sam Triggs added that the Palgrove partnership was an example of the “progressive rural land ownership models” now being seen in Australia, where family operators partner with investment funds to scale up operations.