August 2, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Queensland Investment Corporation (QIC) has agreed to acquire Stuart’s Creek, the last asset in the Packhorse Pastoral portfolio being sold following the tragic loss of Thomas Strachan, Packhorse’s co-founder and executive director, and his son Noah, and their pilot Garry Liehm, when they died in a plane crash in March 2022. 

Packhorse Pastoral Company Australia (PPCA) launched in Australia in 2021 with its eye set on building a $1 billion portfolio of regenerative cattle properties by 2027 that would play a critical role in carbon sequestration and addressing climate change. 

The plan called for properties to operate mostly under a service delivery model and non-ownership of cattle – meaning the properties would be rejuvenated and leased out to top beef producers for cattle feeding. Through this model, the company aimed to repair the soil with the help of cattle to restore grassland, and by doing so, targeting an IRR of between 8-10 percent (3-4 percent from yields and 5-6 percent from appreciation).

The restoration of these assets would not only improve the carbon content of the soil, but enable PPCA to sell carbon credit offsets at scale in a market expected to be valued at $8.25 billion by 2027, positioning the company as the world’s leading land steward, restorer, and beef supply chain.

“The directors of Packhorse Pastoral will consider Expressions of Interest to continue the successful regenerative work the company has been undertaking on its properties,” said Tim Samway, chairman of Packhorse Pastoral at the time. 

“That could be with a new partner who could inject substantial new capital but equally the company would welcome interest from local landowners who may wish to acquire one property or a line of three outstanding properties and so benefit from the economies of scale.”

This final divestment brings to QIC’s Natural Capital platform – Stuart’s Creek, an 8,300-hectare beef grazing operation with registered carbon baselines and sequestration strategies in place, marking the second asset acquired by the Queensland Natural Capital Fund, following a 2022 deal for a 600-hectare irrigated sugarcane property outside of Mackay, Queensland. 

“Packhorse is a recognised leader in carbon farming and that legacy is not lost on any of us,” said Tom Murphy, head of natural capital, QIC. 

QIC initially entered the ag sector in 2016 in a big way when it acquired an 80 percent stake in one of Australia’s oldest and largest agricultural enterprises, North Australian Pastoral Company (NAP). At the time, the transaction was estimated to be in the vicinity of A$300 million.

Murphy went on to state that the acquisition of Stuart’s Creek will allow QIC to build on its existing agricultural and natural capital investments and expertise that has been gained since. 

“In Stuart’s Creek, we acquire a solid foundation to explore environmental market opportunities that are complementary to the existing traditional cattle grazing operations,” said Murphy. “This is prime agricultural land that also has significant areas registered for sequestration, offering the best of both worlds in cattle and carbon.”

“There is a genuine alignment of the Packhorse vision and QIC’s Natural Capital platform, giving us great confidence in carrying on this important work to deliver positive commercial and environmental outcomes.”

Likewise, Geoff Murrell, managing director with Packhorse Pastoral, noted that the sale represented a true alignment of outcomes and solutions for the environment and investors. 

“The sale of Stuart’s Creek has delivered strong shareholder returns and the compatibility of a new land steward to continue building on the solid regenerative agricultural practices Packhorse had underway,” said Murrell.

“Packhorse had registered 20,000 hectares of land with the Clean Energy Regulator that is primed for carbon sequestration. We are fortunate to have collaborated with some notable partners and industry experts to establish an exceptional foundation for biodiversity above and below the ground.”

This facet of collaboration is another detail that QIC stated it intends to continue. 

“We welcome the opportunity to continue collaborations with academic, environmental and industry groups to support new and existing biodiversity projects on site,” said Murphy. 

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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