A PROPERTY leased as a sheep holding feedlot by troubled livestock exporter Wellard Ltd is being sold by a company associated with its managing director Mauro Balzarini.
La Bergerie, the 334 hectare live export sheep holding facility at Baldivis and one of the first properties – if not the first – purchased by the Balzarini family in Australia, is being sold off-market by private treaty.
The asking price is believed to be $32 million.
The Australian Quarantine and Inspection Service (AQIS) accredited facility is capable of holding 75,000-80,000 sheep with automated feed and watering systems and a shearing capacity of 3600 sheep a day, according to the Wellard Ltd website.
It is listed on the website, along with the Stirling cattle holding yards at Hazelmere, as Wellard’s Western Australian livestock centres.
Farm Weekly understands the Stirling site, also listed on the website as an AQIS accredited facility, is being offered for sale off-market as well.
But unlike La Bergerie, Stirling, which backs onto the Helena River and retains a remnant rural zoning, has not operated for some years.
The property has been extensively vandalised and is in disrepair.
Construction of the southern extension to Lloyd Street, Midland, proposed to connect with Abernathy Road at the Great Eastern Highway bypass, has the potential to make the site extremely valuable with an industrial rezoning to match the surrounding area.
Both La Bergerie and Stirling are owned by WGH Holdings Pty Ltd, the company through which Mr Balzarini retained a 36 per cent controlling interest of Wellard after a public float 18 months ago.
Last September WGH transferred 66 million shares to Wellard’s Chinese joint venture partner Fulida Group Holdings Co Ltd to clear debts, including $15.8m owed by WGH to Wellard.
A complex $52m working capital raising shares, one-for-four rights and convertible notes issue in April and May further diluted WGH’s equity in Wellard.
Fulida is now principal shareholder with 24.46pc and its representative Mr Kanda Lu was appointed to the Wellard board last month.
WGH is second biggest shareholder with just on 15pc and Paul Holmes à Court and Heytesbury Pty Ltd third with 10.42pc.
La Bergerie is leased by WGH to Wellard and it is expected the lease will continue under a new owner, allowing Wellard to use the property as a pre-export feedlot for at least four more years and possibly up to eight years before the site is redeveloped for housing.
The Stirling site was also once leased by WGH to Wellard, but it is not clear if that lease is still current.
Perth-based specialist funds manager Sirona Capital has said it has contracted to acquire La Bergerie from WGH.
It is seeking investors to join a managed fund to purchase it.
In a document prepared to promote the potential of investing in La Bergerie, Sirona described it as “one of the largest single ownership plots of land in the Perth metro area”.
The document outlined a plan to have the property rezoned from rural to urban under the metropolitan planning scheme and prepared for residential redevelopment over the next eight years.
It stated the property would continue to be leased on a triple leaseback arrangement of four years, plus two subsequent options each of two years.
Income from the leaseback arrangement was expected to “fund holding and rezoning costs throughout the investment term”.
Sirona said it had completed detailed geotechnical, engineering, environmental, water management, traffic and planning diligence across the property and was confident it will provide 3760 residential lots.
According to Sirona, a 4.5 multiple of return over eight years, representing an internal rate of return of better than 20pc, was forecast for investors.
Sirona said it has received interest from national and WA institutional land developers with the “potential for a joint venture, co-investment or option to purchase being explored”.
It intended to rezone the land and prepare it for redevelopment and then on-sell it to a property developer, but said it may also consider doing the residential subdivision itself.
Sirona describes itself as a “specialist alternative funds manager with a focus on urban renewal, private real estate and agriculture”.
Among current and recent projects it lists the Northern Gateway Industrial Park at Bullsbrook and Muchea where it has assembled 350ha, the $270m Kings Square development in the centre of Fremantle and the $128.5m Heirloom conversion of the old Dalgety wool stores in Fremantle to 183 apartments, completed in December.
Managing director Kelvin Flynn declined to comment last week on Sirona contracting to acquire La Bergerie or on plans to redevelop the property.
Farm Weekly was unable to contact Mr Balzarini before going to press but Wellard company secretary Michael Silbert confirmed the proposal was to continue using the La Bergerie property under a lease arrangement after it was sold.
“Wellard has used that property very successfully for a long time and it is very important to us,” Mr Silbert said.
Located off Telephone Lane, between Wellard and Baldivis, a little over a kilometre east of Kwinana Freeway and beside the freight rail line from the South West to Kwinana, La Bergerie abuts vacant land to the west and south.
A jet sprint, water ski and paintball park is a southern neighbour.
Rural residential development is starting to encroach from the north and east with large homes on bush blocks as close as 200 metres away.
Wellard’s public float in 2015 turned out to be a disappointment for shareholders who took the opportunity to invest in Australia’s biggest live sheep and beef and dairy cattle exporter.
A series of missed financial and export targets, shipping delays and high cattle prices in Australia caused its share price to slump after the float.
Earlier this month it announced it was selling Ocean Outback, one of its five livestock carriers, to Israeli company Dabbah Slaughterhouse for about $34.9m.
It said the sale, expected to be completed early next year, would generate about $16.3m to reduce debt and $18.2m cash on hand.
In February Wellard declared a $1.3m loss for the six months to December 31 and difficult trading conditions were predicted to continue into this year.
Last August it announced a joint venture with Fulida, based in Hangzhou south-west of Shanghai, to market Australian beef into China where feedlots and an abattoir were being built to complete the live export pipeline.
Apart from livestock export, a division of Wellard owns and operates Beaufort River Meats, an abattoir and processing plant exporting lamb and sheep meat to the Middle East, Taiwan, the United States, Canada, the West Indies, Hong Kong, Vietnam, Japan, Singapore and China.
Another division operates a feed mill at Wongan Hills producing pellets for Wellard feedlots.
It has cattle centres in the Northern Territory and Queensland.
Outside Australia it has cattle interests in the Philippines, Indonesia and Sri Lanka.