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Tasmania’s largest farm on the block for more than A$65m

Acquired by its owner for A$8.2m in 1997, the 22,000ha Rushy Lagoon is being sold at a time when the Australian government is introducing tighter regulation on foreign ag investment.

Tasmania’s largest farm has been put up for sale through a process that coincides with the revision of rules on foreign acquisitions of Australian agricultural land.

Rushy Lagoon, as the farm is named, encompasses four dairies and an area of 21,861 hectares. Allan Pye, its owner since 1997 and one of New Zealand’s richest farmers, has since expanded the holding with the purchase of adjoining properties Red Hills and East Wyambie.

No prospective amount was disclosed for the transaction, which is being run by CBRE, though Agri Investor understands Pye is looking to sell the farm for more than A$65 million (€51 million; €42 million). He had initially bought it for A$8.2 million from farmland investor Bert Farquar, according to local reports.

Expressions of interest close on April 23. CBRE declined to comment on price expectations.

Rushy Lagoon’s holdings, located in Tasmania’s northeast, comprise four dairies supported by 1,000ha of centre pivot irrigation and capable of milking 4,000 cows. The other livestock operations cover about 7,000ha of arable pasture as well as 7,000ha of grazing country to run 7,000 heads of beef cattle and 7,000 sheep.

The farm, which receives 750mm of average rainfall a year, is endowed with water entitlements of 6,865 megaliters, coupled with on-farm water storages of 4,295 megaliters. It also has “excellent operational infrastructure, productive soil types, and numerous structural improvements, including a 20-stand shearing shed,” CBRE said.

Due process

Danny Thomas, a regional director at the firm who is running the sale alongside colleagues Peter Ryan and Jarrod Ryan, said the opportunity to acquire an irrigated facility in a premium part of Tasmania that still represents “excellent value for money” would attract interest from both domestic and international shoppers.

“Rushy Lagoon will reward future investment in irrigation and pasture development to enable significant intensification with a huge uplift in carrying capacity,” he said.

Tasmania has seen several sizeable transactions recently, including the December sale of dairy farms owned by the AgCap-managed Sustainable Agriculture Fund covering nearly 8,000 hectares. The Rushy Lagoon sale follows the November listing of a $30 million portfolio of four farms owned by the UK’s Matthew and Pippa Gunningham.

Insiders expect the flow of transactions to continue, though some note the possibly tampering effects of a new law requiring all property potentially bringing a foreign investor’s Australian farmland holdings to more than A$15 million be advertised for sale for a minimum of 30 days. The move, in the words of Australian Treasurer Scott Morrison, seeks to ensure domestic buyers have an “equal opportunity to bid.”

Sources Agri Investor spoke to in recent weeks did not think the new policy would help tilt the balance towards domestic investors. Rather, some said that a number of farmers, reluctant to go public about it, were reconsidering their decision to sell.