Proterra puts last Australian farmland assets up for sale

The three assets – Vaucluse, One Tree and Racecourse – are expected to fetch more than A$400m for investors in Proterra’s Black River Agriculture Fund 2.

Proterra Investment Partners has placed its last remaining aggregations of Australian farmland up for sale, as the fund manager completes the divestment of assets owned by Black River Agriculture Fund 2.

The firm has listed three assets: the 4,448-hectare Vaucluse property in Tasmania; the 23,594ha One Tree aggregation in Queensland and New South Wales; and the 14,425ha Racecourse aggregation in Queensland.

The properties span a diverse range of commodity production and are valued collectively at more than A$400 million ($295 million; €269 million), according to selling agent LAWD.

Proterra has decided to bring forward the sale of the assets following the successful sale of its Corinella Farms cropping portfolio in Victoria and South Australia in 2021, which secured A$360 million from 27 separate local buyers in one of the largest farmland transactions of the year in Australia.

“It is a great time to capitalize on the existing strong market while there is insatiable appetite form investors who want to enter or expand in the agriculture space,” Proterra Investment Partners managing director Becs Willson said in a statement.

“We have spent the last eight years building these highly productive agricultural operations and, ideally, they are not assets you would want to sell. However, the short-term nature of our investment fund combined with high commodity prices and the caliber of the assets, presents us with an opportunity to continue our track record of strong returns to our investors.”

Shares in One Tree Agriculture, Vaucluse Agricultural Company and Racecourse Projects, the three holding companies that own the assets, are owned by Proterra’s Black River Agriculture Fund 2 and other co-investors according to Australian Securities and Investments Commission company ownership documents.

The two funds were, among others, spun out from Black River Asset Management, a wholly owned, independently managed subsidiary of agribusiness giant Cargill, on January 1, 2016. Proterra Investment Partners was the asset manager created to take on management of those funds.

Willson said that while these sales would end Proterra’s existing ownership of Australian farmland assets, the fund manager would look for more opportunities in future.

“We believe we have a unique approach in this asset class in terms of our operating models, including equity partnerships with local growers to help build and grow these businesses from the ground up. We also now have a track record in executing profitable exit strategies with our investors at the forefront of our timing and are hoping to replicate this unique model across the Australian agriculture industry.”

Diverse assets

The smallest of the three assets now up for sale, Vaucluse, is an amalgamation of two neighboring properties in Tasmania’s Midlands region, which Proterra developed to house 2,151ha of center pivot and linear irrigation as well as 447ha of hard hose traveler irrigators. The balance of the land is given over to dryland cropping and grazing.

Vaucluse is one of the largest grain production assets in Tasmania, Willson said: “By investing heavily in water infrastructure and agronomics, we have significantly improved yields, while the construction of a 5,424 ton grain storage facility has further allowed us to extract a premium price by holding grain on behalf of customers and delivering throughout the year to guarantee a consistent high-quality product.”

One Tree is an aggregation of 21 individual holdings across Goodiwindi and Jandowae in Queensland, as well as North Star in New South Wales. The properties produce wheat, barley, chickpeas, fava beans, cotton and sorghum, with Proterra investing to transition them from grazing to prime broadacre cropping land.

The fund manager also added more than 48,000t of grain storage across the aggregation in close proximity to commodity processing facilities.

Racecourse spans three separate aggregations across the Clairview and Mackay regions of Queensland and is currently used primarily for large-scale irrigated and dryland sugarcane and beef production.

Willson said Proterra purchased the largest continuously used sugarcane farm in the Mackay region in October 2013, and had built the Racecourse portfolio by acquiring further cattle properties to convert them back to sugarcane production.

“We’re very proud of what we have achieved with Racecourse. We have employed sophisticated agronomic methods and best industry practice across the portfolio to become one of the largest private producers of sugarcane in Australia,” Willson said.

Racecourse also comes with significant water entitlements and on-farm water storage of 2,140 megaliters.

LAWD senior director Danny Thomas said this would allow the portfolio to be developed for high-value permanent cropping: “Racecourse has undergone significant investment in developing the land beyond grazing pastures, and there is natural evolution in that region from sugarcane into macadamia production.”

Expressions of interest for Vaucluse close on April 28, and on May 5 for both One Tree and Racecourse.