INVESTMENT company ROC Partners has acquired John Nicoletti’s majority share in both Murray River Land (MRL) as the foundation asset of its ROC Agri Plus Infrastructure Fund.
It has also bought out Mr Nicoletti’s share in Ulupna Pastoral Company which was formed to manage MRL, an aggregation of around 60 farms, many of them former dairies.
Located between Numurkah and Tocumwal in northern Victoria and southern New South Wales, the investment covers more than 10,000ha.
Both MRL and Ulupna were put together by big-ticket property agent Danny Thomas and Mr Nicoletti, a Western Australian grain-grower and, until earlier this year, one of its biggest John Deere dealers.
“Roc’s investment succeeds Mr Nicoletti’s ownership and allows him to pursue his acquisitions of significant grain-growing properties in WA,” MRL and Ulupna said in a statement.
Mr Thomas remains a minority shareholder in both entities, and will retain a directorship in them alongside two ROC Partners representatives.
“Roc is pleased to bring new Australian institutional capital to this investment, bringing irrigation water back to highly productive land and forming part of the renewal under way in this part of the Goulburn-Murray Irrigation District,” ROC Partners partner Brad Mytton said.
“We very much look forward to the partnership with Danny and to build on the solid foundation Danny and John have put together.”
The MRL asset was listed in May through LAWD and Map19.
Centred in the Strathmerton district, the portfolio, which was initially listed as covering 15,000ha, takes in country as far north as Finley in NSW, and in Victoria runs south to the Nathalia and Numurkah districts, and east to Cobram.
The entire MRL asset has around 8000ha of winter crop in the ground.
Mr Mytton said the MRL asset represented ROC Partners’ first large-scale investment in cropping country, and was part of a fund which targeted an internal rate of return of 12-14 per cent per annum.
ROC Partners is a Sydney-based alternative investment management firm.
Its other investments in food and agriculture are Hive+Wellness which includes Capilano Honey, blueberry and vegetable producer Flavorite, Stone Axe Wagyu beef, Australia’s Oyster Coast, and broiler-farm developer and operator ProTen Limited.
It purchased Emerald Grain from Sumitomo late last year, and Mr Mytton said he did not expect grain grown on the MRL asset to necessarily be marketed or stored with Emerald.
“There’s probably a couple of GrainCorp sites that are closer, but Emerald Grain has a site at Tocumwal which may come into play.
“This asset has a different ownership to Emerald, so there’s no direct expectation they’ll be involved with each other.”
“This is a new fund on our side, and it’s an open-ended vehicle targeting more capital intensive investment associated with commercial food production.”
“We’ve got the scale, and we don’t need to aggregate, because more water and more ongoing development will allow different agricultural pursuits.”
Initial development of the property is expected to include the installation of lateral-move and centre-pivot irrigation systems, and the incorporation of otherwise stranded assets.
While permanent plantings by investors including MRL neighbour goFARM are occurring in the Murray Valley, Mr Mytton said trees were not on the radar.
“They’re not in our base case.”
“We’ll grow cattle, and crop, with the ability to continue to invest.
“In dry years, we’ll be focusing on water as the most profitable piece of the puzzle.
“Cattle feeding might be good for us in some years, and it won’t in others; we want to be able to flex the aggregation.”
He said the land was already being agisted to a small number of vertically integrated beef producers, and this income stream could be underpinned with irrigated fodder production.
“We don’t have plans to own cattle.”
While the properties have in the past run sheep, Mr Mytton said cattle appeared to be the preferred option.
He said down the track, the fund was likely to make other investments in different locations.
The MRL portfolio listed in May as covering 15,000ha, and having an annual water allocation of 20,000 megalitres.
This comes from deep and shallow bores and high-security surface water delivered direct from the River Murray, and from a regulated network of channels.
While a price for the sale has not been disclosed, Grain Central understands it was in line with recent district values of up to $10,000/ha.
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