This article is from the Australian Property Journal archive
MELBOURNE-based Prime Value Asset Management has acquired Tasmania’s biggest dairy farming operation for more than $60 million from Van Dairy Group, after the Environment Protection Authority investigated management concerns at the farms.
The acquisition includes 11 “outside the gate” dairy farms in the Circula Head region and includes 5,000 cows and 2,200 hectares of the 19,000 acquired by Van Dairy owner Xianfeng Lu in 2016 for $280 million, after trumping Australian competitors at the 11th hour.
Van Dairy Group came under pressure earlier this year after a leaked auditing report raised concerns about the farm’s management, while Circula Head Council issued environment protection notices to Van Dairy last month requiring dairy effluent management improvements on nine farms.
Lu said the sale “delivers on our promise for Australian companies to own 10% of the land”.
Prime Value has now added the properties to its growing stable of dairy farms. Existing dairy assets include two farms in southwest Victoria, and another farm in northwest Tasmania.
The boutique fund manager began investing in Australian agriculture more than five years ago with the acquisition of citrus farms across the Sunraysia region, and also manages agriculture, equities, income securities, direct property and other alternative investments.
“We believe the Circular Head region of northwest Tasmania offers some of the best farmland in Australia, and with consistent rainfall and a temperate climate, it is ideal for sustainable and profitable dairy farming,” Elizabeth Blackhurst, a portfolio manager of Prime Value’s alternative assets said.
“We also believe by focussing on our environmental and social responsibilities, and the welfare of our animals, we can create a farming portfolio that delivers long term benefits to the community and strong, consistent returns for our investors, many of which are self-funded retirees and SMSFs.”
Kirsti Keightley, dairy investments manager for Prime Value and who has a long background in successful dairy farming, said “Prime Value is a hands-on manager willing to take the time to acquire, turn around and build quality assets.
“We already manage a farm in Tasmania near these farms, so this acquisition makes perfect sense for us.
“We’re excited by the potential of these farms and with a falling national herd and falling national milk production, we believe this is the right time to be expanding our portfolio.”
Keightley said Prime Value has been in dialogue with the Tasmanian Dairy Industry Authority, EPA Tasmania and Circular Head Council and “we look forward to working with them, the community and local businesses to transform these assets”.
