Australian Financial Review | 25 August 2024Swedish pension fund looking to offload $50m of WA farms
by Larry Schlesinger
Swedish pension fund Forsta AP-fonden is downsizing its Australian farmland holdings after listing about $50 million of cropping properties in Western Australia’s Great Southern region.
The 5595-hectare holding is part of a portfolio of farming properties acquired by the $69 billion pension fund– known as AP1 – more than a decade ago.
They include the 16,000-hectare Merri Meric near Henty in the NSW Eastern Riverina, acquired in 2012 for just under $7 million. Property records show it also owns 10 properties in WA.
Its holdings are managed locally by Melbourne-based First Australian Farmland, which had a fair value of 622 million Swedish Kronor ($90 million) according to a June 30, 2024 report by AP1.
A canola crop at AP1’s Stirling farm in WA. Supplied
The pensions fund’s returns have been hit hard in the past few years by war, the pandemic, high inflation and high interest rates – turning negative in 2022.
It turned its performance around in the first half of 2024, generating a 5 per cent return, but revealed a huge hit to the value of its infrastructure investments.
Real estate returns were flat over the June 2024 half-year. Real estate comprises about 14 per cent of AP1’s portfolio.
The biggest of the two aggregations up for sale in WA spans 3052 hectares at Stirling – about 65 kilometres northeast of the regional centre of Albany.
It’s made up of the three properties – Gidget, Range Montana and Wimbush – with price expectations of $26.2 million.
Selling agents Simon Cheetham and Simon Thomas from Elders said these properties were predominantly operated under a sustainable canola and cereal cropping rotation and were in a mild-climate zone.
An additional 2543 hectares comprise the nearby properties of Tagliaferri and Goodhope, which are also being sold via expressions of interest. These properties have also produced wheat and barley and run about 9000 sheep.
The WA properties have been aggregated over 11 years by First Australian Farmland. AP1 is selling the properties to focus on other investments.
“It is an ideal acquisition for farmers or investors looking to increase their footprint in a reliable, tightly held, generational farming location,” Mr Cheetham said.
In 2019, AP1 sold the historic Aberfeldy estate near Holbrook in southern NSW to the Field family for around $18 million.
In other news, wine giant Treasury Wine Estates has listed its 577-hectare Yankabilly Vineyard estate near Wentworth in South West NSW. The property includes a 323-hectare vineyard predominantly planted to Chardonnay and a 2799-megalitre water licence.
Toby Langley from Langley & Co is handling the sale.
Treasury Wine Estates revealed plans to sell the vineyard as part of plans to mothball its Victorian commercial winegrowing operation. This included shutting its Karadoc production facility near Mildura.
The winemaker is also divesting its vineyards in Lake Cullulleraine, in Victoria’s northwest.
“We continually review our global vineyard assets to ensure they’re in the best possible places to grow our premium and luxury portfolio,” Treasury Wine chief supply officer Kerrin Petty said in July last year.
