This article is from the Australian Property Journal archive
MORE than $20 million is expected in the sale of Australia’s second-largest free-range poultry farm, with the four broiler farms across South Australia’s lower and mid-north regions hitting the market.
Southern Cross Farms Portfolio encompasses four contiguous broiler farms, which were fully converted to free-range production in 2015.
Located around an hour out of Adelaide at 85 Wandel Road in Owen, the portfolio produces free-range chicken under the Lilydale brand, with a recently secured a Grower Agreement with one of Australia’s largest poultry processors, Baiada.
Chris Holgar and Geoff Warriner from JLL’s agribusiness team are managing the on-market sale via an expressions of interest campaign on behalf of a private vendor.
“Southern Cross Farms is a long-established holding that has been progressively modernised,” said Holgar, senior director of agribusiness at JLL.
“It’s a unique opportunity to buy an asset of scale under the growth of the Lilydale brand and with a price expectation well below replacement value based on construction costs.”
The farms comprise 29 poultry sheds for around of 61,000sqm and capacity for around 947,200 birds per batch, with a well-established management team also in place.
“Free range and organic chicken accounts for about 20% of all chicken sold domestically and this figure is expected to grow to close to 25% during the next five years,” he said.
“This speaks to the strength and surety of demand, noting Southern Cross has significant long-term grower agreements – and further options – with Baiada Poultry Limited, one of Australia’s largest chicken meat processors and its conduit to Lilydale.”
The four farms offer a combined 200 hectares of prime agricultural land, with dryland areas across each plus plenty of space to establish further income streams.
With the dryland farming allowing for the production of bedding for broiler sheds, with the areas currently leased with payment in lieu made via supply of 1,200 bales per annum.
“The portfolio’s high-quality infrastructure – including recently converted free-range broiler sheds with new brooding areas – is supported by modern management systems, with a well-established team already in place,” said Warriner, senior director of agribusiness at JLL.
“This supports a focus on either active involvement or passive investment.”
While eight new sheds are set to be constructed by March 2027, for a total expansion of 24,280sqm.
Improvements also include a large-scale desalination plant and 500KW solar system with power factor correction and extensive onsite accommodation via five residences, a centralised office and workshops.
“Other key investment drivers include its water security, with water drawn from the main South Australian system and stored on-farm,” added Warriner.
“Geographic separation of the portfolio’s farms – Rockwood, Dalkey, Giles Corner and Days Hill – also provides a biosecurity hedge against cross-farm contamination.”
Australia’s poultry industry is experiencing ongoing growth in domestic consumer demand, with per capita consumption of chicken well outpacing beef, pig and sheep meat.
“With major players Baiada and Ingham’s remaining largely absent from the ownership and operation of ‘grow out’ farms, the industry is undergoing significant evolution, from a market dominated by private family farms to one that is quickly becoming institutionalised,” said Grimshaw.
“Holdings such as Southern Cross Farms represent a strong agricultural infrastructure play.”
Over the June quarter, Australian farmland saw a reduction in annualised returns as capital growth slowed, though income returns did continue to display resilience.
With the rural market seeing the $40 million from the sale a 559,500-hectare Northern Territory cattle station Murray Down in September.
With a Far North Queensland mixed grazing and cropping property with renewable energy project potential recently listed with expectations exceeding $70 million. While Colliers Agribusiness recently listed a Permanent Water Entitlement in Victoria’s Goulburn Valley.
The expressions of interest campaign for the Southern Cross Farms Portfolio is scheduled to close on 21 November 2024.
