Northern station values set to take off

23 Nov, 2015 06:10 AM
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Where we have seen the big growth has been in the Northern Territory and Western Australia

VALUES for cattle stations across northern Australia are on the rise and experts say watch out for Queensland where summer rains could trigger a boost in the state which has lagged behind because of drought.

The latest analysis by CBRE, which has been valuing the S. Kidman & Co portfolio of cattle stations, shows values rising across the Northern Territory, Western Australia and to a slightly lesser extent Queensland.

"Where we have seen the big growth has been in the Northern Territory and Western Australia and the reason for that is because they have come off such a low base," CBRE head of valuation Tim McKinnon said.

"We expect sustained growth in values and we expect Queensland will show the big growth over the next 12 to 18 months."

While the CBRE data includes major deals such as Australian Country Choice's joint venture with the Acton Land & Cattle Company, Chinese billionaire Xingfa Ma's $47 million purchase of Wollogorang and Wentworth cattle stations on the shores of the Gulf of Carpentaria, and Chinese group Hailiang's $40 million buy up of Hollymount Station, there are a host of recent deals that have not been included and will likely show a lift in Queensland values.

Such deals include M.P. Evans Group's sale of Woodlands, near Westmar in southern Queensland for $28 million to China's Fucheng Group, BRW Rich Lister Tom Strachan's purchase of Lighthouse Station for $14 million, and Canadian pension fund-backed Hewitt Pastoral company's purchase of multiple stations including Sir Graham McCamley's Oakleigh and Stoodleigh properties north of Rockhampton for $13 million.

"We expect premiums will continue to be paid for A-grade properties but B- and C-grade properties may still be a drag on values," Mr McKinnon said.

He said the lift in values was due to factors such as strong beef prices, low Australian dollar, low cost of funding, increasing foreign investment interest and improved property management.

In the Northern Territory major transactions such as billionaire Brett Blundy's prospective buy up of two huge cattle stations owned by Macquarie Group's Paraway Pastoral are expected to boost values.

So far only smaller transactions have registered such as the sale of barrister Allan Myers' Douglas Station for $8 million, an increase on its last valuation of more than 20 per cent. In Western Australia deals such as Gina Rinehart's $30 million purchase of Fossil Downs are expected to boost value analytics in the fourth quarter.

AFR

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