Landline / By Matt Brann Posted Sat 3 Jul 2021 at 7:17amSaturday 3 Jul 2021 at 7:17am

Record cattle prices, low interest rates and good seasonal conditions have fuelled a property boom in northern Australia’s beef game, with some high-profile names set to cash in.

Key points:

• Record prices are being paid for northern cattle stations
• Farmland values are on the rise across Australia, with the median price per hectare up 12.9 per cent
• Gina Rinehart is on track to cash in, with her northern portfolio of cattle stations expected to sell this month

The famous Wave Hill Station in the Northern Territory sold earlier this year for more than $100 million — at the time a record for a single pastoral holding.

But that has now been eclipsed with the sale of Miranda Downs in Queensland’s Gulf Country, which reportedly went for around $180 million.

According to Rural Bank, the median price per hectare for Australian farmland increased 12.9 per cent last year.

“Across the board for all commodities, [farmland] values are up,” said Will Rayner, Rural Bank’s chief operating officer.

“But anything to do with red meat is behaving very well and we’ve seen some sensational results in the beef cattle sector in particular.”

But is the market overpriced?

In terms of being able to generate a return from such huge farmland investments, Mr Rayner said the fundamentals were strong.

“The ability to get a return on investment is dependent on a range of factors, such as the volume of produce you can produce off the land, the price you can achieve for that, and then the price of debt — and all of those are looking pretty good at the moment,” he said.

“I think what you’re seeing with some of this sustained growth, is that there’s no more farmland being produced, it’s a finite resource, and Australian farmers are getting really good at producing more from that same parcel of land.

“Particularly in the northern cattle region, where you see investments in better dog fences and water infrastructure, it means the productivity is improving and it’s driving farmers to pay these sorts of dollars.”

An ABARES report into the financial performance of livestock farms found the average rate of return for NT cattle stations had almost doubled in the last 12 months to 3 per cent, and the average business profit for NT stations now sat at $707,000. 

Mr Rayner said it would take a few factors to change for the market to “cool”.

“But we certainly don’t subscribe to a boom-bust scenario in this instance, because we think those fundamentals are pretty strong.”

Rinehart properties on track for July sale

ABC Rural has been told the highly-anticipated sale of Gina Rinehart’s northern portfolio of cattle stations in WA and NT is on track to be finalised this month.

The portfolio includes seven cattle stations, one feedlot and around 100,000 head of cattle.

“After a very high level of interest, a number of parties were short-listed into the stage-two process,” said Elders agent Tom Russo. 

“Physical inspections of the properties were delayed because of the north’s above average wet season, but have now been completed.

“Short-listed buyers are making their final offers and it’s anticipated the properties will be sold in July.”

Mr Russo said the sale had attracted a mix of foreign and domestic investors, as well as established local beef producers looking to expand their operations.

Retail billionaire Brett Blundy must also feel the time is right to sell, putting more than 1 million hectares of NT cattle country on the market,

Up for sale is Amungee Mungee, Cresswell Downs and Walhallow Downs, which Mr Blundy bought in 2014-15 

It has been estimated the combined value of the Rinehart, Blundy and North Star Pastoral stations up for sale in the NT could exceed $680 million — although with records continuing to fall, the pay days for these large corporates may end up being more.

Mr Rayner said it was clear “some of them are going to make some really handsome profits”.