Ellis Lea, a substantial South Canterbury dairy farm portfolio, has been acquired by an undisclosed New Zealand-based investor in one of the country’s largest ever rural transactions.
The immaculate offering comprises two dairy farms, Grandview and Lamorna, together with support block Collett Farm.
The transaction, negotiated by Colliers Rural Sales Advisors George Morris and Mark Parry, is the most significant land sale seen in the Canterbury dairy market for some time, totalling more than $70 million as a going concern.
Collectively they produced an impressive 1,789,898kgMS in the 2020/21 season, equating to 465kgMS per cow or 1,896 kgMS/per eff ha, with only 692 kgDM of introduced feed fed per cow.
Morris says the impressive production is underpinned by an equally impressive financial performance.
Grandview Farm, in Old Main South Road, Orton, covers 420ha while nearby Lamorna, at Chalmers Road, spans 524ha. The 249ha Collett run-off is approximately 30 minutes from the farms.
The scale of the offering, sold as one portfolio, meant the buyer was unlikely to be local, Morris says.
“We were confident the likely buyer was going to come from a group of parties active in the market, including corporates, institutional funds, and large-scale families who we knew were genuine and qualified.
“Given the complexity of the transaction, and the due diligence required, it took nearly five months from the start of the expressions of interest process to the contract confirming.”
Morris says the Ellis Lea assets have always been of interest to corporate buyers because of their scale, location, excellent resources, infrastructure, and proven consistency in production and profitability.
“David and Karen Ellis are industry leaders with a reputation in the industry for being very good farmers and stewards of the land. The way the farms are presented, the productivity and the care taken to ensure environmental regulation is not only complied with, but exceeded, is admirable and made the properties very desirable to buyers.”
Parry says the Canterbury agricultural market and, more specifically, the dairy market, is going from strength to strength.
“On farm profitability is very healthy and a new-found confidence in food production and health food in a post-pandemic world seems to be encouraging astute buyers. Commodity prices, as well as futures markets, remain strong and continue to bolster confidence for buyers and create a sound margin for returns.
“It’s good to see the investment sector return to the dairy market after a notable absence – it’s always been an important source of capital.”
Rural transaction numbers in Canterbury have increased notably across the past three years and market conditions remain strong. There is also greater investment from local capital as opposed to overseas investors.
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