Retail mogul, Brett Blundy, with wealth estimated by the BRW Rick List to be $1.09 billion, is looking to acquire two large cattle stations in the Northern Territory from Macquarie Group’s Paraway Pastoral, one of the top five landholders in Australia, in a deal worth $100 million.
Taking note of the increasing demand from Asia, Brett Blundy is looking to follow the footsteps of other industry tycoons who have turned their attention to obtaining a larger foothold in the country’s agriculture sector, and particularly its cattle industry.
If the deal closes successfully, Mr. Blundy will be adding to his existing significant agricultural holdings and to his portfolio that holds retail businesses including Bras N Things, Adairs, Diva, and the real estate investment trust, Aventus Retail Property Fund which is approaching its initial public offering.
The two stations in question are Paraway’s Walhallow and Cresswell Downs station, which together encompass 1 million hectares of land across the Barkly Tablelands and run an estimated 60,000 head of cattle. The stations also border Mr. Blundy’s two existing stations – the Beetaloo and the Mungabroom which themselves cover 1 million hectares.
Stations such as these are valued on a basis of ‘beast area’, or the number of head of cattle that can be run on the property rather than the number of hectares the property includes. Given a herd of 60,000 head, and based on a price of $1,000 per beast area, would indicate a value of at least $60 million for the property, with a likely value of $40 million being assigned to the cattle.
If the deal moves forward at $100 million, it would indicate a stark jump in prices for the cattle station industry, just when it appears that a buying spree is only just beginning.
In the past two months Chinese investors have spent $120 million buying rural Australian properties while there is $1 billion worth of deals in negotiations including the sale of S. Kidman & Co.’s portfolio and Consolidated Pastoral. Domestic buyers have also been quite active. Over the past six months Kerry Stokes and partner, Peter Murray acquired a 3,000 hectare station on Kangaroo Island in South Australia, and Gerry Harvey bought a 2,000 hectare Coomboona Holsteins property in Victoria.
Gina Rinehart and Andrew Forrest have also been actively expanding their interests to include agribusiness. In 2014, Forrest’s Minderoo bought Western Australia’s largest beef processor, Harvey Beef, while Gina Rinehart acquired dairy assets and a cattle station near Dubbo.