SALIC to sell Western Australia broadacre cropping portfolio

A Western Australian grain farm the size of Bahrain is already attracting attention from institutional investors, real estate agents say.

The Merredin Farms Wheatbelt Portfolio is the largest corporate broadacre landholding in Western Australia.

The Saudi Agricultural and Livestock Investment Company has put its Western Australian broadacre portfolio on the market, seeking an undisclosed price.

The Merredin Farms Wheatbelt Portfolio, owned by SALIC – a subsidiary of Saudi Arabia’s sovereign Public Investment Fund – and Australian agrifood company PenAgri Farms, covers 77,954ha of freehold land, of which 66,159ha are arable.

That makes it the largest corporate broadacre landholding in Western Australia, according to listing agent Colliers.

The portfolio comprises cropping and livestock production, with 143,000 metric tonnes of wheat and 54,000 metric tonnes of barley harvested in 2022, according to SALIC.

SALIC owned the Merredin portfolio as part of its 2019 acquisition of the 200,000ha Baladjie aggregation from Western Australian grain farmer John Nicoletti.

The value of that acquisition – SALIC’s first investment in Australian agriculture – was not disclosed, but Australian media reported at the time that it could be as high as A$70 million ($47 million; €43 million).

In a statement, SALIC Australia CEO William England said the Merredin Farms Wheatbelt Portfolio offered buyers a “substantial position” in Western Australian agriculture.

“The portfolio offers a turnkey corporate farming operation inclusive of world class governance, HR, procurement and WHS systems all focused on growing wheat, canola and barley sustainably.”

Boots on the ground

SALIC, a Saudi joint-stock company created by royal decree in 2009 and owned by the Public Investment Fund, established an office in Perth in 2019 off the back of the Merredin Farms purchase.

England said the Merredin sale would allow SALIC to shift its focus onto other agricultural value chains in the region.

SALIC is also an investor in Australian animal protein, with a 35 percent stake in Minerva Foods Australia, which owns the Australian Lamb Company.

PenAgri Farms managing director Greg Harvey said the sale of both the landholding and agribusiness held global significance. “Our team see this combined offering to be a spectacular agribusiness opportunity with huge upside for the new owners at settlement.”

Colliers will run an international expression of interest campaign for the land and related business. Head of agribusiness Rawdon Briggs said any investor who took up the offer would instantly become Western Australia’s largest corporate broadacre farmer. “Possessing critical mass and with economies of scale, the vendors have created an incredible platform for low-cost, high-volume grain production.”

Briggs said enquiries had already started rolling in from groups that did not require any bank lending.

The sale encompasses Merredin Farms’ land, operations, equipment, infrastructure and workforce.

Briggs said that on top of its core business in grain production, the portfolio also offered the potential for future earnings through carbon farming and renewable projects.

He said an existing windfarm just outside the town of Merredin showed the potential for this kind of additional investment within the Merredin portfolio.

Buyers could also put the portfolio’s non-arable land to use if they chose to enhance vegetation cover for carbon sequestration.

“The vendors’ preference is to settle the property prior to planting in the autumn,” Briggs said.

Expressions of interest close on February 14, 2024.

Agri Investor has contacted SALIC for further comment.