Aware Super keeps $100m of water, sells the farm to Costa family
Aware Super has sold its Lake Boga farming portfolio in northern Victoria’s Goulburn Murray Irrigation District to agricultural investment firm goFarm for about $30 million, but will retain about $100 million of high-security water rights.
The 9014-hectare portfolio of organic and conventional horticulture and cropping land – which includes Victoria’s biggest field tomato grower, a commercial plum orchard and a sheep grazing business – was put up for sale in September last year by the country’s third-largest superannuation fund,
The $150 million combined offering included about 3721 hectares of irrigated farmland and 20,000 megalitres of water rights. Aware Super is a big owner of water rights, which it leases out to nut producers such as Olam and Select Harvest.
Comprising 38 properties between Kerang and Swan Hill, the Lake Boga aggregation was put together over a period of about 15 years by VicSuper, which merged with First State Super in 2020 to create $130 billion giant Aware. Agricultural asset manager Kilter Rural was the long-term manager of the portfolio.
goFarm, led by chairman Robert Costa, is a joint venture between managing director Liam Lenaghan and Costa Asset Management, the private investment arm of the Costa family (founders of ASX-listed fruit and vegetable producer Costa Group). The company purchased the land, plant and equipment at Lake Boga as well as 8167 megalitres of low-reliability water entitlements.
In a statement, Aware Super said it had “retained ownership of [12,000 megalitres] high-reliability water rights that were previously part of the portfolio”.
Despite the farmland divestment, Mark Hector, an Aware Super senior portfolio manager, said the super fund remained committed to the agricultural sector.
“We will continue to invest in strong, sustainable agricultural assets that support regional Australia and deliver strong, long-term returns for our members,” Mr Hector said.
Record agricultural production
Danny Thomas, of agency LAWD, and PwC’s Greg Quinn negotiated the sale.
goFarm said the current wet cycle, which drove a record $83 billion of agricultural production last financial year, and was forecast to generate more than $80 billion in 2022-23, was “supportive of the profitability of irrigated agriculture”.
If it does need to buy water, it can do so at low prices – the Department of Agriculture (ABARES) forecasts water allocation prices in the Southern Murray-Darling Basin to fall to $58 per megalitre this year compared with an annual average of $617 during the 2019-20 drought.
goFarm’s acquisition of the Lake Boga portfolio follows the firm selling its Yarrabee Park grain growing aggregation in the NSW Riverina in March for more than $60 million to Daybreak Cropping, a joint venture between Warakirri Asset Management and Canada’s Public Sector Pension Investment Board.
In February, goFarm put its 6298-hectare Sandmount Farms portfolio in Victoria’s Murray Valley region up for sale with price expectations above $250 million.
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