September 14, 2021 By Nelson Yap, Australian Property Journal
AUSTRALIAN cattle property investment firm Packhorse Pastoral Company has opened its second fundraising as part of plans to buy $1.5 billion worth of rural agricultural land and build mass-scale land regeneration with carbon upside.
Packhorse is seeking to raise $50 million in the latest round following the success of the first offering which resulted in the purchase of Stuart’s Creek, a 8,360-hectare property in Queensland.
Chair Tim Samway said the company is ramping up its expansion plans with the imminent settlement of another two properties, both set to deliver solid growth
opportunities and returns for investors, as the company eyes $1.5 billion in investments over the next five years.
“Rural agricultural land is fast emerging as a valuable stand-alone investment, providing competitive risk-adjusted returns and low correlation compared to traditional asset classes. Packhorse Pastoral Company delivers investors an opportunity to own a piece of Australian country that has a long history of strong capital gains, due to its finite nature and provision of sought-after quality grass fed beef,” he added.
Packhorse’s privately managed cattle property portfolios have achieved annual total returns of 22.65%, underpinned by rising land values and stable income streams from long term agistment agreements negotiated with major cattle companies and beef processors.
“Currently, we’re seeing an increase in land price because the opportunity in the sector is being noticed,” Packhorse Investments Australia CEO of pastoral Geoff Murrell said.
“There is considerable pressure in the market, but our focussed and disciplined off- market acquisition strategy gets us access to quality properties at good prices. Coupled with the added security that comes with our agistment revenue model that smooths the peaks and troughs, we deliver even in times of volatility,” said Murrell.
Meanwhile Australia’s rural and agricultural market shows no signs of slowing.
“We know that food production will need to almost double in the next 30 years to feed the population and the global demand for sustainably sourced Australian grass-fed beef is increasing.
“These are critical drivers that underpin Packhorse’s mission to accumulate and regenerate agricultural land on a significant scale across Australia,” Samway said.
Packhorse is also improving soil and grassland quality to enable carbon to be more successfully sequestered in the rejuvenated land. Samway said the carbon credit market grew 20% in 2020 to $272 billion.
“To play a part in this emerging market may well present investors with a significant financial upside.
“In August Packhorse engaged market leader Carbon Link to provide a carbon baseline for Stuart’s Creek which could sequester up to 2,800 tonnes of carbon per annum across an estimated 4,000 hectares of land. The additional revenue generated by on-selling carbon credits, as organisations globally pledge net zero targets, was certainly an appealing aspect of the first fundraise with investors keen to be part of a fund deploying sizeable carbon capture programs across a growing portfolio of suitable land,” he concluded.