March 14, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Daybreak Cropping, an investment fund backed by PSP Investments – Canada’s largest pension fund with $204 billion in AUM on behalf of the Canadian Public Service, Canadian Armed Forces, the Royal Canadian Mounted Police, and the Reserve Force – and managed by Warakirri Asset Management, has acquired Yarrabee Park, a grain aggregation in New South Wales, from goFARM in a deal reported to exceed AUD $60 million. 

Elders was appointed by goFARM in September 2021 to oversee and manage the sale process for the aggregation, which is one of the largest contiguous broadacre cropping assets in Eastern Australia. 

Founded in 2013 with the Costa family, goFARM is one of the largest agricultural investors and managers in Australia, with about A$1 billion (US$720 million) in AUM, owning or managing approximately 70,000 hectares (172,974 acres) across New South Wales, Victoria, and Tasmania, including about 5,500 hectares (13,591 acres) of orchards.

Comprising 11,260 hectares (10,000 hectares, or 88 percent arable), Yarrabee Park has a high-performing management team in place and a proven productivity track record, producing about 37,500 tons of grain and fodder last year, with half the land sown in barley, and the remainder sown in a combination of wheat, canola, hay, and pulses prior to the sale.

The property is laid out in 13 management zones based on soil type and topography to optimize inputs, and has 740 hectares (1828.5 acres) developed for lateral irrigation with the opportunity for further development.

There has been extensive investments in soil fertility, land use conversion, and productivity efficiency with three forms of water sources: groundwater (Zone 3 Lower Murrumbidgee), the Murrumbidgee River, and Coleambally Irrigation Co-operative Ltd. scheme access. The water gained from these sources is in addition to the 433 mm of rainfall that usually comes in spring and winter.

There is 1,750 tons of on-farm seed and fertilizer storage, and extensive infrastructure developments have been designed to support a highly efficient grain production enterprise.

In September 2021, Liam Lenaghan, founder of goFARM with Costa Asset Management, the investment arm of the Costa family, commented on the property, saying, “Yarrabee Park is an excellent example of the goFARM investment strategy. I  immediately recognized the potential of the asset – its high-quality natural resource base, 430mm  annual rainfall, contiguous scale and location. We invested heavily in improving the soils, reconfigured the layout and built new infrastructure to support a high performing farming  enterprise.”

This potential was also recognized by the international investment community, noted Nick Myer, state manager at Elders Real Estate, who was supported in the sale process by colleagues Matt Horne, Angus MacLeod, and Mark Barber, stating that the aggregation was “exceptionally well received”, with “very strong interest from both domestic and international purchasers”.

This marks the eighth acquisition for Daybreak Cropping, which will expand its overall portfolio to more than 85,000 hectares (210,040 acres) across eight aggregations in New South Wales, Queensland, Western Australia, and Victoria.

Australian cereals, pulses, and oilseeds are all benefiting from strong fundamentals in both the domestic and export markets. Rising global demand on the back of the global pandemic, global trade disruptions leaving supply gaps needing to be filled, the highest prices in 32 years, and a superior growing season have created a pole position for the Australian agriculture sector which is expected to reap a record $81 billion this financial year.

In addition to the agricultural income, there is also a sizable proposal in place for a large-scale solar project on the property, presenting the opportunity for a diversification project with the potential to generate A$3 million (US$2.16 million) per year for 30 years for the new owner.

“Australian agriculture  has reached a point where assets of this caliber and scale are able to be offered to a market that is experiencing significant liquidity at this level,” said Mark Barber, head of agribusiness investment services, Elders. “Institutional investors know that they can invest in assets such as Yarrabee Park and exit at their choosing, knowing there is an expanding pool of capital  looking to deploy in the sector.”

goFARM seems intent on further capitalizing upon these market conditions, as it has also listed its 6,298-hectare Sandmount Farms property in Victoria with expectations of fetching more than AUD$250 million from a buyer who is prepared to invest another AUD$200 million to fund upgrades on the asset.

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– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.