One of the largest scaled organic dairying portfolios in the Southern Hemisphere has been placed on the market for sale, providing sustainability options for astute buyers.
Spread across the Southland region, the Aquila Sustainable Farming portfolio has an amalgamated farm footprint of 2,971 hectares across six productive organic dairy units and 871 hectares from two leased organic support blocks.
The properties have a high-standard of farm infrastructure and improvements, including 27 homes.
Owned by Aquila Capital, one of Germany’s first alternative investment management companies, the portfolio offering provides the opportunity for a like-minded entity to acquire one of Southland’s largest dairying operations as a going concern.
The operational side of the portfolio is overseen by Aquila Sustainable Farming Ltd (ASF), with this proven overarching management structure supported by experienced on-farm teams and established relationships throughout the supply chain part of the offer.
The farms are operated under a Limited Partnership model specific to each farm.
The Aquila Sustainable Farming portfolio is being marketed by way of Expressions of Interest closing 4pm, Thursday 18th November 2021.
Duncan Ross of Bayleys said the offering in its entirety has built-in efficiencies and meets rigorous compliance thresholds across animal welfare, health and safety, environmental and organic production.
“Market-leading operator ASF is the only specialised organic dairy farm management company in New Zealand,” he explained.
“It draws on more than 25 years of collective knowledge of organic farming, leveraging learnings from its European farms long before entering the New Zealand market more than a decade ago, giving it a tangible advantage over other organic operations in this country.
“It has also developed rigorous systems and standard operating procedures, including ISO 9001:2015 certification, to maintain compliance with organic and future environmental standards, with ASF the only asset management company of its kind with this internationally-recognised certification.”
Four of the six Aquila portfolio farms were converted to A2 organic in 2020, with Aquila likely to be the largest single supplier of certified A2 organic milk in New Zealand today.
Producing 1,797,641kgMS in the 2020/21 season production lifts are forecast for the 2021/22 season further as the organic conversion strategies are bedded in.
The AsureQuality-certified organic Aquila portfolio farms are located close to the Open Country Dairy (OCD) Awarua plant, allowing the organic milk to be received, checked and processed within hours of milking.
Ross said while the Aquila portfolio as a holistic investment proposition in its existing going-concern capacity has obvious benefits from scale and efficiencies generated through the ASF management model, he also anticipates wider enquiry from the rural market.
“There are potentially numerous scenarios for genuinely interested parties looking to secure productive farmland in the Southland region,” he said.
“However, as a going-concern scaled operation with resilient and proven management structures, the portfolio is expected to resonate with investors seeking a well-managed entity founded on sustainability and global best-practice.
“There is a wave of investment capital circling in the market looking for opportunity and New Zealand’s primary sector provides scope for compelling returns.”
Global demand for organic milk products and growth in the wider organic sector nationwide follows rising consumer sentiment for sustainable and ethically produced food.
“New Zealand’s organic sector is growing steadily, averaging a growth rate of 6.4 percent a year since 2016 and the established relationships ASF has forged with OCD, provides a guaranteed organic premium to milk price,” said Ross.
The day-to-day operations of the farm portfolio are underpinned by sound environmental, social and governance (ESG) principles around animal welfare, sustainable environmental practices and the development and well-being of its staff.
Resilience to climate change is an important advantage of the organic farming system, amplified by the relatively benign outcomes of the Intergovernmental Panel on Climate Change scenarios on the future effects of climate change on Southland.
Director and farm salesperson Pip Ryan of Country & Co in partnership with Bayleys, says the Aquila portfolio offering is the largest Southland portfolio to come to the market since around 2000 and he’s expecting interest from outside of Southland given the properties’ credentials and opportunity.
“The easy-contoured Southland Plains may not be on dairy farm investor radars and consequently, land in the region could be underestimated as a prospective addition to an investment portfolio,” said Ryan.
“In comparison to higher profile areas, Southland is a relatively affordable dairying proposition with dependable fundamentals including a moderate climate with good year-round rainfall and reliable summer rain, and highly-productive rich soils, allow consistent grass growth for optimum returns on yield.
“Southland farming systems are predominantly grass based, with the use of supplementary feed in the shoulders of the season to ensure more consistent milk supply year-round and allowing for flexibility of farm systems to capitalise on high milk prices for higher returns.
“In addition, the gently-contoured and easily-managed land in Southland supports good animal health, and the region benefits from having multiple dairy processing options.”
Ryan said as a significant employer in the Southland region, ASF has integrated itself with the Southland community, regularly contributing to local initiatives such as the Meat the Need fund, the SdE Bale Wrap Recycling Fundraiser and being recognised as finalists for several Southland Business Excellence Awards in 2019 and 2021.