Massive, two-State farming portfolio for sale with $400m expectation and leaseback generating $16m a year

WA’s farmland price record could soon be broken with a massive cropping and livestock portfolio mainly near Esperance now on the market and hopes it could net $400 million.

Project Jaal — 43,000ha of farmland split between Victoria’s Mallee and the WA’s Esperance regions — has been listed for sale and leaseback arrangement by its unnamed Australian expat vendor.

More than half of the land is based in WA, with 26,834ha near Munglinup and Esperance, while the remaining 16,000ha is located in the Mallee region with some near Swan Hill.

The portfolio has been listed with a starting rent of $16m a year on a triple net lease, which allows the tenant (the existing vendor) to pay for expenses including on-farm maintenance costs.

A weighted annual lease expiry lease has been offered with an initial 20-year term, followed by two 10-year potions, annual CPI-based rent reviews and market rent reviews every five years.

The sale is being handled by LAWD — which set up shop in WA in 2021 and has since managed several high-profile sales including one that set the existing top farmland price — and PwC.

The properties have been marketed as having potential to produce about 150,000 tonnes of grain and to “build to” a 10,000 head breeding cattle operation focused on Angus beef.

The Esperance property is understood to consist of a 900-head Angus stud, a 2000-head commercial cattle herd and a 10,000 sheep, lamb and wool enterprise.

It also includes significant grain acreage and is understood to be capable of producing more than 85,000 tonnes of grain a year.

Meanwhile, the Mallee land for sale is planted to wheat, oats, barley, lentils, lupins, vetch, chickpeas and canola, believed to be capable of 60,000t of grain annually.

The high price of WA farmland has been a hot topic in recent years, with the State’s farmland sale record smashed in January with the $100m sale of the 8554ha Cherylton Farms near Kojonup.

The Cherylton sale smashed the previous record of $97.62m set when Melbourne-based Daybreak Cropping purchased Erregulla Plains — a 22,192ha broadacre enterprise near Mingenew in WA’s Wheatbelt — in February 2020.

WA’s median price per hectare was $5121 last year, as sales increased 27.5 per cent to $895m.

Figures recently released by Rural Bank revealed the median price of farmland had risen 157 per cent during the past five years.

LAWD .. Danny Thomas and Elizabeth Doyle are handling the sale, with te help of PWC … Jaclyn Hope and Greg Quinn.

Mr Thomas said the vendor was keen to grow its portfolio by reinvesting the funds into more property purchases and developments.

Project Jaal is being offered for sale with expressions of interest closing at 12pm on July 6.