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Investment fuels region’s growth

Hundreds of millions of dollars are pouring into northern Victoria in an unprecedented agricultural investment boom.

National and international entrepreneurs are buying up thousands of hectares of under-utilised farmland and transforming them into large farming enterprises.

Many former dairy farms are being converted to cropping or horticulture, as the pension funds and investment companies identify opportunities for good returns.The companies are spending big on land transformation, irrigation infrastructure, machinery and agricultural services.

In a few instances the companies are paying high prices to acquire the most promising properties.

In what could be a record price per hectare, Perth-based Primewest paid $15 million for a 50-hectare orchard in Old Dookie Rd, Shepparton, in a lease-back deal.

The same company spent $4.8 million to acquire Pinegatta, a 425-hectare property near Deniliquin last year.

Two investment companies, Kilter Rural and goFARM, are spending hundreds of millions of dollars on acquiring and aggregating farms in northern Victoria.

goFARM is developing the region’s largest almond orchard at Katunga.

Leaders of the investment companies put the interest in the region down to a number of factors including soils, automated water delivery infrastructure developed by the $2 billion Foodbowl Modernisation Project, a pool of potential skilled labour in the populated region, and good transport and communication networks.

Shepparton valuer David McKenzie described the current phenomenon as “a wave of opportunity” washing over the rural landscape.

He said there was a range of macro forces working in the region’s favour, including the urban encroachment on Werribee and Gippsland prompting vegetable growers to move, the international demand for quality food, affordable land prices, and favourable market conditions.

“I’ve never seen commodity conditions this good across so many sectors,” Mr McKenzie said.

At a more regional level, investors could now access a modernised, automated irrigation delivery system, and water was available above the Barmah Choke. Recent rule changes also meant that it was going to be harder to move water to developments downstream of the choke.

The Kilter Rural private investment company has spent about $170 million in northern Victoria acquiring farms and redeveloping them. Kilter Rural chief executive officer Cullen Gunn said his company had purchased eight properties in the Girgarre area, which were mostly former dairy farms. Kilter intends to plant mostly annual crops on the regenerated land, with about 40 per cent being converted to organic profiles.

Meanwhile, privately owned investment firm goFARM is developing three large scale farms in the Cobram East, Katunga and Yalca districts.

MAKING THE RIGHT MOVES

The region’s biggest investment moves over the past two years include:

  • A Canadian pension fund buying an interest in four family-run orchards totalling 500 ha, west of Shepparton, starting from July 1, 2021. The orchards sold for an undisclosed figure, running into millions of dollars.
  • goFARM starting work on the region’s largest almond orchard at Katunga, which is part of a 7000 ha acquisition of three main areas.
  • Kilter Rural acquiring eight properties in the Girgarre district, extending its 12,000 ha portfolio in northern Victoria.
  • Private equity firm ROC Partners buying a controlling interest in the Murray River Land Trust Portfolio, which includes more than 10,000 ha of farmland owned or managed in northern Victoria and the southern Riverina.
  • Perth-based investor Primewest paying $15 million for a 50 ha orchard in Old Dookie Rd, Shepparton.
  • Giant international company C K Life Sciences buying out the SEEKA company’s ownership of the Bunbartha kiwi fruit orchard in a multi-million dollar deal.

WHY CHOOSE NORTHERN VICTORIA?

goFARM managing director Liam Lenaghan handles a muti-million-dollar investment portfolio with a large portion of it spent in northern Victoria.

Country News asked him why his company chose the region. His answers were:

  • soil fertility;
  • climate;
  • water resource above Barmah Choke;
  • $2 billion modernised irrigation infrastructure;
  • social and community infrastructure supporting the population;
  • skilled labour pool;
  • three-phase power; and
  • machinery dealerships, packing and processing facilities, and cold storage warehousing.

Article written by Geoff Adams | Country News
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