Interstate buyers eyeing off hort land

Interstate buyers eyeing off hort land

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Well-sized properties with large water allocations are in high demand.

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HORTICULTURE properties have been in high demand from interstate buyers, particularly throughout the northern Perth gateway region around the Gingin to Lancelin areas.

Rural real estate agents said properties with large water allocations were extremely sought-after, with interstate-based corporations and institutional investors with financial backing from North America and Europe being a dominant buyer demographic.

Colliers International agribusiness transaction services director Jesse Manual said WA's water availability compared to other States was very appealing to buyers.

"I think what's increased interest from investors in other States has been predominantly the availability of extensive ground water resources, which have been under-utilised compared with some of the larger irrigation developments in the Eastern States," Mr Manual said.

"Currently in the Eastern States we have seen considerable developments in permanent tree crops and cotton, whereas in WA there have been less large scale irrigation developments, so investors from the Eastern States are looking for the next opportunity and the next resource to go and take advantage of and develop."

As well as buyers wanting to capitalise on WA's underground water resources, Mr Manuel said expanding into WA also offered buyers more geographical and climate diversity and the opportunity to "access earlier markets for products and take advantage of earlier market prices".

He said buyers were most interested in developing properties to grow citrus, stone fruit and edible nuts.

"I think WA's water resources could be undervalued at the moment," Mr Manuel said.

"But the value is a bit of an unknown because there are less water entitlements traded in Western Australia, so until we see further developments and more trades of water entitlements, it's going to be difficult to really ascertain value, but all we know is that water entitlements for irrigation in the Eastern States are at an all time high and that's why investors are looking to WA for the next opportunity where the water is under utilised."

Landmark Harcourts region corporate and business development manager Glenn McTaggart, said the horticulture market had tightened up recently, with a lot of the water allocations being taken up, but the Gingin/ Lancelin regions had been particularly strong.

"Prices in that area have gone up a bit, about 10-15 per cent," Mr McTaggart said.

"Demand has been coming from both corporates and larger family operations, but it's not major - there have only been a few but they have been reasonably strong."

Despite the record breaking deal of Erregulla Plains at Mingenew which saw Daybreak Cropping, which is managed and part owned by New South Wales-based Warakirri Cropping, as the buyer, Mr McTaggart said there had been little demand from interstate buyers for broadacre properties, with most interest in that sector being from local WA or international buyers.

But CBRE Agribusiness director Danny Thomas expected interstate demand to increase.

"There have certainly been inquiries from people looking to rebalance their businesses where they have been 'found out' during the drought," Mr Thomas said.

"But I am not yet fielding a massive tsunami of enquiry from people looking for Western Australian land yet.

"However, I think it will come and the penny will drop at some stage, because WA farmland represents really good value relative to the Eastern States and it's uncorrelated in terms of the rainfall."

He said the capabilities of the transport operators, with high numbers of livestock going east from WA, could add to buyers' appetite of expanding in WA.

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