Significant local and overseas interest is expected in more than 10,000 hectares of prime cropping land that hit the market on the Eyre Peninsula and Mid North this week.
Hassad Australia – owned by Qatar’s sovereign wealth fund – bought the land less than five years ago but is selling to focus more on investments beyond the farmgate.
It is expected to be the state’s biggest land sale since the University of Adelaide sold its Mid North properties; Martindale and Munduney.
Industry estimates put the value of Hassad’s SA portfolio at up to $60 million.
Elders has been appointed for the 7106-hectare Cummins/Ungarra aggregation and CBRE will market the 3263ha Glendale aggregation, near Clare.
Expressions of interest are being sought either as a whole or for individual parcels.
Elders real estate general manager Tom Russo expects significant interest from Australian and foreign corporates as well as local operators looking to expand.
“The South Australian market typically remains fragmented with large-scale aggregations being difficult to acquire,” he said.
CBRE director Phil Schell said the Glendale aggregation represented an opportunity to secure a foothold in a coveted farming region.
“The Mid North is one of the state’s most tightly-held cropping regions, with the majority of operations held by third, fourth and fifth generation farming families and it is anticipated this opportunity to acquire a substantial presence in the region will attract strong interest,” Phil said.
Ray White Rural SA and Clare Valley principal Geoff Schell suggests the Mid North land may make about 10 per cent more than Hassad paid for it in 2013, with the market rising about 15pc.
Geoff, who sold the first two parcels of the aggregation to Hassad, says his “gut feel” is that the 12 landholdings will be broken up, especially as it is not all adjoining.
“The most efficient farming businesses are often family farms,” he said.
“There would be three or four potential buyers whose home base property is within 15 kilometres to 20km who could potentially get a syndicate together.”
He said Hassad’s main focus had been cropping, which may have impacted its returns.
“With the outstanding sheep and wool prices in recent years , most of the very successful farming businesses in the Mid North are often mixed farming operations,” Geoff said.
“A cropping and livestock mix is a sound way to manage risk.”
Member for Flinders Peter Treloar says the sale is “no real surprise”.
“There could be a whole host of reasons why they have taken the decision to sell but I do know the corporate farming structure will always have its challenges in the Australian farming environment,” he said.
“The overheads are always higher than family farms which can tighten their belts when they need to and I understand they paid top dollar for it.”
Mr Treloar says the offering will provide a great opportunity for Eyre Peninsula farmers and others across the state to expand if the properties are sold individually.
“There is some very good cropping country around Ungarra and with high stock prices the Edillilie country which can suffer in wetter years will also be in demand,” he said.