October 7, 2024

By Gerelyn Terzo, Global AgInvesting Media

Australian ag investment manager GO.FARM has scooped up a pair of water-rich agricultural value-add projects, including the Dellapool Aggregation and Sandmount North in Narrandera, New South Wales and Katunga, Victoria, respectively. Worth a combined A$150 million (US$101.3 million), the investment involved the participation of Qantas Super, an A$9 billion (US$6 billion) super fund. Qantas Super’s investment in the water projects is part of a bigger A$200 million (US$135.1 million) commitment it made to GO.FARM earlier this year.

With Qantas Super’s backing, GO.FARM will acquire over 5,000 hectares (12,355 acres) of farmland with a view to transform it into more productive properties. The new assets buoy GO.FARM’s portfolio assets to A$1.3 billion (US$875 million).

GO.FARM Founder and Managing Director Liam Lenaghan stated, “We will unlock the full potential of these assets using technology and sustainable water management to deliver both strong financial returns and tangible benefits for regional communities.”

One of the deals features the Dellapool Aggregation in Australia’s Riverina region comprising thousands of megaliters of water entitlements, owing to the land’s previous use case as hazelnut farms. GO.FARM will reportedly convert the assets into high-density olive groves — where fruits can appear after just a couple of years — to satisfy robust demand. These properties were put on the block a year ago by Italian packaged-food company Ferraro at a reported price tag of A$80 million (US$54 million).

GO.FARM’s other purchase, Sandmount North, is spread across 1,556 hectares (3,844 acres), including 3,200 megaliters-plus of water entitlements. Located in Victoria’s Murray Valley, which has gained a reputation as a water-secure and climate-smart region, this is where GO.FARM intends to expand its almond and tomato operations. According to Rabobank, Australia’s almond sector is on pace for a “year of growth” that will outperform 2023 as the stars align over input prices, water prices, water availability, climatic conditions and export prices.

Meanwhile, the water rights tied to both acquisitions are key. Lenaghan highlighted that agricultural investments backed by water licenses will be well-placed as the pool of water resources available to ag users in the Murray-Darling Basin decreases. Additionally, the Australian government is undergoing water purchasing in the Murray-Darling Basin through which it seeks to capture additional water for environmental uses.

The participation of Qantas Super might not have been possible just five years ago, GO.FARM CEO Liam Lenaghan told The Australian, as back then agriculture was hardly on the radar of most super funds. Now, he said, “the dial is certainly shifting,” noting that natural capital has become an important theme for these institutional investors, including agricultural land as an attractive addition. “The industry knows their members expect them to be making responsible investments including investing in natural capital and in rural communities,” he added.

Qantas Super CIO Andrew Spence shared how the fund has been impressed by GO.FARM’s value-add approach to assets, saying, “Their excellence in execution, combined with their deep understanding of agriculture and commitment to sustainable practices, sets them apart as an agricultural manager. Backing GO.FARM in these acquisitions aligns with our mission to deliver strong, long-term returns for our members through high-quality investments in sectors poised for growth.”

GO.FARM told GAI News, “We see that the Australian farmland sector is growing and attracting new capital investment, including from super funds. Interest in the asset class is rising, driven in part by society’s evolving expectations around its food production systems.” GO.FARM’s Lenaghan also stated on LinkedIn, “Thank you to Andrew Spence and his investment team at Qantas Super for their ongoing investment support, as well as our family office and HNW investment partners.”

Earlier this year, GO.FARM launched a $300 million (US$198.4 million) capital raise for deployments with a heightened focus on natural capital assets.

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