January 24, 2018

Milltrust Agricultural Investment (MAI) announced the acquisition of two adjacent dairy farms in the Southern Riverina district of New South Wales for an undisclosed amount.

The two farms – the Invergelly and Taminga – were acquired through MAI’s Australia Buy & Lease Fund, which has built a portfolio of seven farms since its launch in 2016.

Founded in 2010 by Simon Hopkins, and with offices on five continents, Milltrust International is co-headquartered in London and Singapore. In March 2016 the firm announced that The Royal Borough of Windsor and Maidenhead (RBWM), on behalf of the UK’s Berkshire Pension Fund, has committed £30 million to the Milltrust Agricultural Investments New Zealand and Australia Buy & Lease Farmland funds.

Under their investment thesis, the funds acquire cash flow-positive farms and farmland assets, including permanent crops, arable, and pastoral farmland, which are then leased to experienced operators across the focused geographical regions of Australia and New Zealand with the goal of generating annual lease income of between five and six percent with an additional expected (real) annual capital appreciation of at least five percent.

The group’s “Buy-to-Lease” strategy is led by the Investment Committee comprised of Griff Williams, CIO Milltrust Agricultural Investments, Simon Hopkins, CEO, Milltrust International, and Mark Ebert, Chairman of the Milltrust International Managed Investments ICAV. The Advisory Board members include Elders director, James Jackson, CEO of Australian Rural Capital, and Simon Bentley, CEO of Commoditia and formerly head of research at Invenio, Olam Group.

The latest addition of Invergelly and Taminga give MAI two dairy operations with a combined 550 hectares of laser-leveled bordercheck pastures set up for grazing, Invergelly being an irrigated dairy farm and Taminga offering additional irrigated land to use as a platform to expand the milking operation. The herd, which will be retained through the established lessee agreement, was noted as the top producing jersey herd in the country of Australia. Furthermore, additional water rights have been purchased to support MAI’s plans to continue to expand the herd and raise output.

Other plans for improvements to the properties include the building of a calf shed and feedpad, and the integration of the two properties through the addition of laneways and crossings. Once fully developed, the feedpad and integration plan are expected by MAI to result in a significant increase in production to more than 6.5 million liters of milk in the coming season.

“This investment represents a carefully structured entry for the Fund into the Australian dairy sector,” said Williams, “The quality and experience of the farm management partners and the opportunities to leverage highly productive assets by introducing further investment in technology provides an exciting long term opportunity for our investors.”

Prior to this deal, the most recent acquisition for the MAI Australia Buy & Lease Fund occurred in November 2017 with the acquisition of Lurline North – a large scale mixed cropping farm located in Emerald, Queensland.

The farm, which produces chickpeas, cotton, hay, maize, mung beans, peanuts, potatoes, pumpkins, rice, dolicots (a legume), sorghum, and wheat in rotation totals 1,965 hectares, of which 502 are developed to center pivot irrigation and 703 hectares are dedicated to dryland production.

Whereas the addition of Lurline North have MAI a foothold in a promising agricultural region with advantageous geographic, climatic, and farming diversification, the addition of Invergelly and Taminga give the fund properties in a region known for its superior soil, reliable water, and history of high-level production.

Another acquisition by the Australia Buy & Lease Fund last year happened in April with the addition of Cottrell Farms – a collective of citrus, avocado, and wine and table grape orchards located in the Sunraysia region of Victoria.

The Cottrell farms encompass four adjacent properties including 200 hectares planted in a range of premium quality citrus varieties, and a smaller area planted in avocados and table and wine grapes. All plantings are relatively young, ensuring a decades-long term of expected output, and consist of the latest and newest licensed varieties that are being targeted to both Australia’s domestic market as well as rapidly growing Asian markets.

-Lynda Kiernan