PSP-Warakirri JV buys 22,000 ha WA property for A$97m

Daybreak Cropping, a joint venture between Canada’s Public Sector Pension Investment Board and Australian fund manager Warakirri Asset Management, has purchased Erregulla Plains in Western Australia for approximately A$97 million ($65 million; €60 million).

The deal is one of the most valuable single-farm transactions in WA’s history. It is Daybreak’s third acquisition in the state and its first in the northern section of WA’s Wheatbelt.

Erregulla Plains covers approximately 22,000 hectares of land in one contiguous block and is a well-known property in the region, renowned for high yields and reliable rainfall. It has traditionally been used for producing broadacre crops such as wheat, canola and lupin, and for grazing livestock.

Around 18,000 hectares is used for cropping, with the balance used for livestock grazing.

Daybreak Cropping was founded as a broadacre cropping platform in 2016 and is managed by Warakirri Asset Management.

Daybreak now owns a portfolio of seven properties: three in WA, two in New South Wales, and one each in Queensland and Victoria. Erregulla Plains is Daybreak’s largest property by some distance: the next-largest in its portfolio is Bodallin Farms in WA’s eastern Wheatbelt, which has around 12,500 hectares of arable land and was purchased by the firm in April 2019.

In a statement, Daybreak Cropping CEO Will Heath said: “Daybreak is pleased to have an asset of Erregulla Plain’s quality in the portfolio. Its scale, efficiencies, stage of development and proximity to the port of Geraldton make it a highly attractive asset.

“In addition, it is our first asset in the Northern Wheatbelt of WA and therefore provides important diversification benefits for the business. We look forward to continuing the responsible stewardship of the asset and contributing positively to the Mingenew community.”

Heath was unavailable for further comment prior to publication.

The move further broadens PSP’s exposure to Australian agriculture, which now encompasses multiple subsectors in most Australian states.

As well the broadacre cropping JV, the C$168 billion ($126 billion; €116 billion) pension has significant exposure to horticultural assets in the Murray-Darling Basin and owns a significant portfolio of water rights.

Its recent deals include acquiring 89,075 ML of permanent water rights and 12,000 ha of almond orchards from Singapore-based Olam International, for a total consideration of A$490 million in December 2019; agreeing to take ASX-listed agribusiness Webster private in a deal that valued the firm at A$724 million in October 2019; and purchasing a majority stake in NSW cropping enterprise BFB from Proterra Investment Partners in January 2019.

The Erregulla Plains sale also highlights continuing interest from institutional investors in WA’s Wheatbelt, which has performed strongly in recent seasons while drought has affected Australia’s eastern states.

Saudi Agricultural and Livestock Investment Company made its first move into Australian agriculture in 2019, with the purchase of the Baladjie aggregation in WA from the Nicoletti family for a sum believed to be as much as A$70 million.