Macquarie goes grain farming

Australian Financial Review | 2 April 2012
Medium_macquarie group aims to raise $2 bln infrastructure fund
Australia's Macquarie Group is in the process of raising up to $700 million for the purchase of grain-producing farms in Australia and Brazil.

Macquarie Group's new farmland fund has purchased its first two properties in Australia worth a total of almost $40 million.

The Australian Financial Review can reveal that through a new company known as Lawson Grains, Macquarie purchased the dry-land farming property Kealandi near Moree in northern NSW for more than $16 million.

Another rural property transaction near Esperance in Western Australia, worth more than $20 million, is believed to have been finalised as well.

Macquarie has declined to comment on the transactions as it is at a sensitive stage in raising up to $700million for the purchase of grain-producing farms in Australia and Brazil.

Macquarie already has a large pastoral fund which aims to acquire $1 billion worth of grazing land.

Macquarie's new vehicle purchased the 4000 hectare Kealandi on the quiet in an off-market transaction brokered by Peter Houlahan from stock and station agents Houlahan Young.

The agents have declined to comment on the transaction.

An equipment and machinery clearing sale for the property has been advertised and conducted, which is typical of the fund's corporate strategy of replacing existing farm management with contractors.

Market sources said the indicative pricing of about $4000 per hectare was a strong sales result for the area.

Moree is known for its blacksoil country - a highly productive soil which can retain moisture for months on end.

While it is not known how much Macquarie's new fund has to spend, market sources said Lawson Grains, whose directors include former Twynam Agricultural executive chairman Christine Campbell, had been scouting Australia for several other large rural holdings.

Macquarie has become one of Australia's largest landholders. Its separate pastoral fund, known as Paraway Pastoral, operates more than 3 million hectares of land across the country and has been active in the marketplace.

Last year it bought three properties in north-western NSW from Clyde ­Agriculture for about $60 million.

The year before Macquarie bought 160,000 hectares from Twynam in a deal that industry sources estimated was valued at about $70 million without water licences.

It had earlier purchased Twynam's flagship Steam Plains in the Riverina for more than $30 million.

Macquarie's foray in the rural market began in 2007 when it picked up Riverina properties Pooginook and Bulls Run.

It went on to buy $169 million worth of northern Queensland cattle country from cattle baron Peter Hughes's Georgina Pastoral Company and more than $150 million worth of the Australian Agricultural Company's Gulf country.

However, Macquarie's rural land funds have plenty of competition when it comes to acquiring land.

At least $4 billion is being raised to buy rural property around Australia through numerous corporate entities which form the backbone of the commercial rural farming market.

KEY POINTS Macquarie has purchased a farm near Moree for $16 million-plus. It also purchased a $20 million property near Esperance. Macquarie aims to acquire $1 billion of grazing land.

Who's involved?

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