Debt-distressed rural Qld making strong spring sales

13 Oct, 2014 03:55 AM
Comments
7
 
The properties were sold above what they had been valued at, which is a very strong result

RECEIVERS for 10 financially distressed rural properties in central and southern Queensland have achieved well over $12 million in sales.

The first tranche of properties, known as the Mott Portfolio, at Meandarra, west of Dalby, had been placed into the hands of receiver PPB Advisory by National Australia Bank.

The portfolio of four properties totalling 7408 hectares sold off-market for a price believed to be well over $7 million, with a split between graziers and Sydney-based investors buying in.

The properties, Yambeen, Warooka, Nameerah and Woodville, were sold through Ray White Rural's Bruce Douglas.

The second tranche of properties included six holdings once owned by KM Cattle Company, placed in the hands of receiver PPB Advisory by Bankwest.

The properties totalled 2882 hectares of grazing country.

Of the six properties, five sold at auction on Thursday through Ray White Rural's Bruce Douglas and Mark Simpson for a total of $5.4 million.

The properties, all destocked of cattle, were in the Moura and Biloela districts. They included the 1194-hectare Fairhaven, which topped the sales at $1.92 million. Numerous local graziers bought up the properties.

Ray White Rural's Mark Simpson said the result was a very good sign for the market. "They weren't record prices but they do show that prices are stable," Mr Simpson said. "I haven't seen any increase in property prices but this year there has definitely been a lot more interest from buyers."

Ray White's Bruce Douglas said the strong sales were testament to the high quality of the properties and their good maintenance.

PPB Advisory maintained a management force over all the properties. Its head of agribusiness for Queensland, David Leigh, said maintaining properties after they had fallen into financial difficulty was crucial for making sure they attracted strong sale prices.

"The properties were sold above what they had been valued at, which is a very strong result.

"Maintaining good management of the stations is critical because a buyer will always magnify the value of what extra work will need to be done to bring the property back into order."

In separate Queensland cattle station sales during last week, an undisclosed Rockhampton buyer snapped up Blackall properties Tilbury and Milroy for more than $5 million through Elders.

AFR
Date: Newest first | Oldest first

READER COMMENTS

Bushfire Blonde
13/10/2014 6:43:57 AM

If these properties are selling for more than what they were valued at, that means the bank's valuations were too low so that raises the question - why were they placed in Receivership anyway? Sounds like more Corporate Bullying to me. What do you think Bushie Bill? - you seem to know everything.
Jacky
13/10/2014 3:11:11 PM

Maybe they borrowed more than they could repay - it does happen you know.
Whatevs
13/10/2014 8:05:58 PM

Brushfire blonde...what a property is valued at has nothing to do with someone being able to service debt. When the bank has security of an asset and you default, the bank takes possession.
wtf
14/10/2014 5:06:28 AM

It should have something to do with earning potential though whatevs, otherwise one would have to question where that money is coming from and its effect on distorting the market. There is moral hazard incurred in a banking system where they can manufacture inflation by creating money on a computer, this has led to the distortion of asset values and is reckless and causes harm to many, esp when there are alternatives such as reserve banking.
Bushfire Blonde
14/10/2014 6:06:34 AM

It has to be remembered that when an entity borrows money, there are two signatures on the Agreement - the borrower AND the lender. Especially in the Rural game, just because an entity is struggling to service its debt today, does not mean that it cannot service its debt tomorrow. I classic example of this is the Northern Cattle Producers who had an enormous hit by the Live Cattle Trade Ban but now they should have some good trading conditions in front of them and consequently they should have a much improved Cash flow and consequently have a much improved ability to service their debt.
gus
17/10/2014 12:28:41 PM

It is a fact mining and gas compensation money is overvaluing beef cattle production land sales in some areas. It is impossible to purchase and pay off a loan for land at those prices on cattle sale revenue only.
Ted O'Brien.
20/10/2014 4:55:27 PM

How can a debt distressed sale be a strong sale? And why is a fall in prices referred to as a correction? Somebody is pulling somebody's leg.

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