Prime grazing country sold for $9.1m

Prime grazing country sold for $9.1m

Agribusiness
 Family farmers purchasing farmland to lease it out has become more common, with one Western Australian family purchasing three premium properties in the past few years, totalling more than $23 million.

Family farmers purchasing farmland to lease it out has become more common, with one Western Australian family purchasing three premium properties in the past few years, totalling more than $23 million.

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Prime grazing country sold for $9.1m

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A PREMIUM, large-scale grazing property in the South West has been purchased by a farming family, making it one of three key properties purchased as investments in the past few years, totalling more than $23 million.

Milyeanup, at Scott River, is now in the hands of new owners, the Tucker family, of Esperance, from vendors John and Barbara Dunnet.

The buyer could not be reached for comment, but it's understood the family paid $9.1m for the property bare.

Farm Weekly also understands the property, which has 1150 hectares of grazing land, has been leased to a local cattle farmer.

The sale equates to $7913 per hectare.

Ray White Rural WA (RWRWA) directors Rob Chittick and Steve Vaughan handled the sale, acting on behalf of the buyer.

"Milyeanup is a fairly large property for the region which don't come up for sale very often," Mr Chittick said.

"We were retained by the buyer and had it sold fairly quickly."

The property previously ran about 1800 head of mostly Angus with Charolais, Angus and Murray Grey bulls.

Water was a key feature of the property, with a 1.2 gigalitre water licence for the six centre pivots.

There was also 200ha of blue gum forestry.

The Tucker family made another two key investment purchases in the past few years, with Kilburnie and Sorrento.

In 2018 the family acquired the 2430ha mixed sheep and cropping farm Sorrento, Broomehill, in early 2018 for $8.3m ($3415.64/ha).

At auction in November 2018, the family also bought Kilburnie, Broomehill West, paying $6.17m ($4056.54/ha) for the 1521ha cropping and sheep farm.

Both properties were leased out to different operators.

Mr Chittick said RWRWA had "several" private, local investors, much like the Tucker family, who wished to invest in farmland in a landlord capacity.

These buyers are seeking large-scale properties in the $10-$50m range in higher rainfall areas of 375 millimetres a year.

"This is an opportunity for farmers to take advantage of strong property prices by selling and if they want to, they can continue farming by leasing back the property from the investor in a long-term lease," he said.

Mr Chittick said farmers could have the option to lease back their properties after selling, referring to it as a "cash in and keep farming" situation.

A secure long-term lease of about 10 years would still enable farmers to plan ahead with great lease terms, he said.

For those who wish to sell and leave farming, Mr Chittick said that was an option too as a tenant could easily be found given that lease demand is very strong.

Investing in farmland as a landlord has traditionally been done by corporates or superannuation funds, but now family farming businesses have started to take on the trend.

In February 2020, Rabobank reported that leasing had become more compelling for both tenants and landlords alike.

The report stated that leasing was particularly common in WA and South Australia, where grain production is on a large scale.

It found that 38 per cent of WA farmers and 45pc of South Australian farmers leased some area of land they operate.

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