Half Share for Sale in Large Pastoral Farming Portfolio
Half Share for Sale in Large New Zealand Pastoral Farming Portfolio
13 August 2015 – Half the shares in a large pastoral farming operation, New Zealand Pastures Ltd (NZP), are being offered for sale.
NZP is a private company that owns seven properties in Otago and Canterbury with a combined value over $100 million. Its portfolio comprises two partially irrigated and five dryland farms, ranging in size between 958ha and 7,533ha that have been predominantly managed as lamb and beef grazing and finishing units. Combined land area is 23,500ha with an assessed carrying capacity around 140,000 stock units.
NZP trades as Greenfield, and underwent a major restructuring process in 2013 to become internally managed. Its largest shareholder is a Netherlands-based pension fund, which will retain its 50% stake. The divesting shareholders are a small group of professional and institutional investors.
The sale is being handled by Greg Anderson, a director of Northington Agricapital and Shane O’Brien, national director of rural and agribusiness for Colliers International.
“Unlike the dairy industry, red meat is facing a better time and good well managed farms continue to generate attractive returns. The NZP farms are located in Canterbury and Otago, traditionally strong sheep and beef areas with a long history of good quality stock performance,” Anderson said.
NZP is looking for one large shareholder to acquire the half share on offer.
“This is an opportunity to invest in an established vehicle which has a strong performance record and on-going growth prospects. The scale of this offering makes it unusual and we believe it will appeal to long-term investors looking for value-add opportunities.
“NZP is well positioned to improve its performance by further expansion of the productive dryland on all existing properties together with increased irrigation using existing water rights. Two of the seven properties are partly irrigated, and there is the potential to irrigate an additional 670ha over three properties. We also see an opportunity for the development of branded products, and potential investment in processing and distribution capability.”
Anderson said the shareholders who were selling have enjoyed strong returns and are now looking for new opportunities.
NZP is targeting annual cash yields in the 4%-5% range and expects continued strong capital growth.
The portfolio consists of:
· Hitchin Hills, Hurunui. A well developed and partly irrigated grazing and finishing property with total area of 958ha.
· Three Rivers. Located near Kaikoura, a 1,534ha grazing property that has undergone significant development.
· Grantham Springs. 1,312ha of grazing and finishing land in North Canterbury.
· Hills Creeks. Located in Central Otago, a large developed dryland sheep and cattle finishing property covering 3,767ha.
· Huntleigh. An amalgamation of three adjoining properties in Central Otago. Total land area of 6,404ha, extensively developed for finishing and grazing.
· Quailburn. Just out of Omarama in North Otago, a 1,802ha grazing and finishing property with further irrigation potential.
· Styx. A well developed Central Otago grazing and finishing property (7,533ha) with further irrigation potential.