Shenhua Watermark Coal has sold a 16,500-hectare parcel of land that was earmarked for a mine in the Gunnedah region of New South Wales in a deal worth about $120 million.
The landholdings were carved up and sold to a group of local farming families and a corporate institution following an agreement made with the NSW Government last year.
Under the deal, Shenhua returned its exploration license to the NSW Government and withdrew its mining license for the site.
“We have owned the majority of these assets for over ten years and have formed good relationships with the farmers who have continued to work the land,” a Shenhua representative said.
“Given these properties will now be retained for farming instead of being used for a coal mine, we are delighted that CBRE has been able to work with local families to give them a real opportunity to purchase a significant portion of the land.”
CBRE’s agribusiness team negotiated the sale, which resulted in 45 expressions of interests after some 59 inspections.
CBRE’s Agribusiness Managing Director David Goodfellow said the Gunnedah region was well-known for its highly productive soils, its wide range of well-proven agricultural systems and its typically even distribution of rainfall throughout the year.
“By fostering and encouraging local participation we received a genuine mix of corporate and family farming interest and it became a very equitable process, which resulted in the sale of about one third of the whole portfolio to an Australian agricultural investment manager and the balance to twelve local farming families,” said Goodfellow.
“Families in this region have recovered well from the drought and are now looking to expand their operations to capitalise on low interest rates and the continued strength in commodity prices to make inter-generational buying decisions.”
Goodfellow said the rainfall pattern in the region meant that it could grow pastures for breeding and fattening livestock right through the year, as well as growing both summer crops and winter crops.
He said some of the land was also highly suited to the regeneration of soils and native forests and could be suitable for projects to create carbon credits.
Two separate families acquired the 1,208ha Tambar Springs aggregation, which comprised three non-contiguous holdings within two kilometres of each other.
Another two separate families purchased the Barraba aggregation, which had a total land area of 1,114ha and comprised two non-contiguous, nearby landholdings.
Breeza, the largest of the three aggregations at 14,270ha, was divided up between eight local families and one corporate farming business.
Goodfellow said five agricultural corporations had been interested in purchasing the whole of the Breeza aggregation because of its scale, location and land quality.
The deal follows Proterra Investment Partners’ sale of the 22,500ha Corinella cropping portfolio for more than $360 million last year.
Other recent rural property deals include Laguna Bay’s sale of a farmland portfolio in Victoria’s western districts for about $70 million and Rural Funds Group acquisition of a cattle and cropping aggregation in central Queensland for $68.8 million.