The Dambadgee Springs project is a 1,600 Ha property located in Dandaragan, Western Australia, 1.5 hours north of Perth.
The property was purchased in March 2017 for $4.2
million and has traditionally been operated for small grain and livestock
production. The property is located in a reliable 600mm rainfall zone and is
highly productive for traditional agriculture.
Alterra has completed a pre-feasibility study for
conversion into intensive dairy and has commenced a pre-feasibility in relation
to the potential for developing water to support high value tree crops
including SHD olives, citrus, pomegranates and table grapes.
In May 2020, the company sold 913 hectares of the property for $3.1
million. The 727 hectares retained by Alterra contains the $2.5 million of
contracted income from Yandin Wind Farm as well as surface water resources with development potential and
areas suitable for livestock, plantation forestry and carbon forestry.
Alterra expects to receive approximately $100,000 p.a. (net of costs)
from a combination of leasing the retained land and wind farm income with an
estimated ongoing annual return of investment (ROI) of 15 per cent
based on the remaining equity held by the company.
Alterra Sells
Part of Dambadgee Springs for $3.1M
Highlights
• Alterra enters contracts to sell 913Ha for $3.1M
• Funds will be redeployed to support Alterra’s avocado
development projects
• 727Ha retained including the $2.5M Yandin Wind Farm income
stream
• Alterra to continue adding value on remaining land
Alterra Ltd (ASX:1AG) (Alterra or the Company) is pleased to
announce it has entered two contracts for the sale of its “Dambadgee Springs”
property totalling 913 hectares of the 1,640-hectare property to a local
farmer.
The property was purchased in March 2017 for $4.2 million plus
stamp duty of $0.2 million.
· Contract 1 valued at $1.6 million is subject to finance (30 days) and expected to settle on or before 10 July 2020.
·
Contract 2 valued at $1.5 million is subject to finance (30 days), land
survey and subdivision approval.
Contract 2 is expected to settle on or before 20th January 2021. The buyer has
agreed to lease the area contained in Contract 2 for the 2020 cropping season.
The area retained by Alterra includes the $2.5 million of
contracted income from Yandin Wind Farm as well as
surface water resources with development potential and areas suitable for
livestock, plantation forestry and carbon forestry.
The partial sale of this non-core asset will enable Alterra to
access additional working capital to advance development operations at the
Company’s projects in the South West region and retire debt on the Dambadgee
Springs property.
Of the funds received from the sale:
• Contract 1: $1.3 million is expected to be retained for working
capital with the balance utilised to retire debt
• Contract 2: $0.7 million is expected to be retained for working
capital with the balance utilised to retire debt
Based on completion of the
above sales, the Dambadgee Springs property is currently achieving a six per
cent internal rate of return (IRR) and 18 per cent return on investment (ROI).
Post settlement of Contract 2, Alterra expects to receive
approximately $100,000 p.a. (net of costs) from a combination of leasing the
retained land and wind farm income with an estimated ongoing annual ROI of 15
per cent based on the remaining equity held by Alterra.
“Alterra is prioritising its development activities in the South
West of Western Australia and the majority of capital released from this sale
will be redeployed into Alterra’s avocado investment program, including the
recently announced Carpenters Project in Pemberton,” said Alterra Managing
Director Oliver Barnes.
“Alterra intends to continue adding value to the remaining land at Dambadgee Springs through pasture improvement for grazing as well as carbon and plantation forestry.”
- END -
About Alterra Limited Alterra is an originator, developer and
manager of in-demand agricultural assets with a focus on ‘land use change’
opportunities in Australia, developing underutilised land and water into the
next generation of agricultural assets capable of supplying premium whole
foods. Alterra drives sustainable growth to leave a positive social,
environmental and economic legacy to unlock investment-grade returns. Visit
alterra.com.au for more information.
For investor enquiries, please contact: Oliver Barnes, Managing
Director P: (+61) 08 9204 8400 E:
obarnes@alterra.com.au
For media enquiries, please
contact: Tessa Dempster, Media Relations P: (+61) 415 640 665 E: communications@alterra.com.au
A PORTION of a premium property at Dandaragan, known as Dambadgee
Springs, is in the process of being purchased by local farmers.
Dambadgee Springs was part of the iconic property Yathroo.
The property of 4170 hectares was listed on behalf of two vendors:
the ASX-listed company Alterra and Mat and Jade Stoney, of Stoney Agri.
The portion that is close to selling is owned by Atlerra, which
comprises 1640ha.
Alterra has retained 727ha of the offering, resulting in 913ha
being bought by a neighbouring farming family for $3.1 million, equating to
$3395 per hectare.
Alterra purchased the property in 2017 for $4.2m or $2561/ha.
This indicates an increase in value of about 24.5 per cent over
three years.
Farm Weekly understands the buyers are cropping focussed farmers
and the portion they purchased was the broadacre part of the parcel and will be
included in in their 2020 program.
The buyer has also leased some of the land that Alterra retained
that will also add to their 2020 cropping program.
The marketing of Dambadgee Springs is being handled by Steve
Vaughan, Ray White Rural WA and Terry Norrish, Nutrien Harcourts.
It's understood that the portion of Dambadgee Springs held by the
Stoneys is likely to be purchased by two buyers - a farmer/farming family and
an agricultural business.
The portion still held by Alterra, of 727ha, includes a $2.5m
income stream from the Yandin Wind Farm, surface water resources and areas
suitable for livestock, plantation forestry and carbon forestry.
Alterra managing director Oliver Barnes said the company would
still continue to add value on the remaining land until it decided to divest it
to suit its investment model.
"The plan is in time to realise that investment and redeploy
that capital in the South West region," Mr Barnes said.
"We have a short to medium-term view of holding this
property.
"There's ongoing investment in the Dandaragan region,
particularly very close to that property in feedlotting and finishing cattle
and we think demand for land in that region will continue to increase."
Mr Barnes said the property was marketed to appeal to a broad
range of buyers and it attracted strong interest, including those looking to
hold agricultural land as a passive investment, but the natural buyer turned
out to be a neighbour.
"I guess the opportunity doesn't come up that often to add
additional land to their operation and they were very familiar with operating
in the region - with those soils and that climate, so they had a good
understanding of what the value attributes of the property were," he said.
"It's also nice to be able to transact with and support
neighbouring farmers in the region."
Moving forward, Alterra plans to focus on its 300ha avocado
investment at Pemberton, the Carpenters Project.
The land and water resources for the project have been leased from
Red Moon Property Holdings Pty Ltd, an entity related to the Casotti Group,
Western Australia's largest privately-owned fruit grower, packer and
wholesaler.
Mr Barnes said the company was not currently seeking additional
assets to develop.
