BILLIONAIRE Kerry Stokes' $25 million purchase of cattle station Napier Downs in Western Australia's Kimberley is the beginning of a buying spree of pastoral lease properties by Australia's big names.
Mr Stokes' purchase of the 400,000-hectare cattle station west of Derby, alongside billionaire Gina Rinehart's purchase of the Fossil Downs station for about $20 million, brings the value of sales in the Kimberley this year to more than 10 times the five-year average for the area.
Western Australia has about 86 million hectares of pastoral lease land, equivalent to 34 per cent of the state, and Elders' Greg Smith expects it will be the big-name, wealthy investors who will rev up the volume of sales for this type of land.
"So far, the big names have only been purchasing established, well-developed properties but there are huge tracts of destocked, undeveloped pastoral land being overlooked and that's where the opportunities are to buy," Mr Smith said.
"So far, [the big names] are yet to take up that opportunity but if they want to get bigger, they will have to look at buying and developing some of that land. Because of the cost of doing that, I think it will be the bigger, wealthier buyers."
Mr Smith has a 1.2 million-hectare property for sale in the southern rangelands, with a $6.5 million bid on it from a wealthy investor, but says it will need another $1 million on infrastructure investment, meaning smaller local graziers wouldn't be able to afford it.
Other big investors such as billionaire Andrew Forrest have snapped up cattle stations in WA's Pilbara but the outlay in terms of equity has been small compared with the entrepreneur's overall wealth and there is plenty of potential for further buys.
Valuer Herron Todd White noted in a recent market update that the firm was aware of more potential transactions in the Kimberley where, of about 105 pastoral leases, there had been only one sold on average each year for the past five years.
"We are aware of two relatively recent offers made for a handful of pastoral holdings that could potentially have added between $40 million and $45 million to this figure if they were accepted."
Further to those potential transactions, S. Kidman & Co, which is for sale, has two large stations in the Kimberley that could be sold in 2015.
In the Northern Territory, there is a similar rebound in the market. There has been about $65 million worth of transactions for cattle stations there so far in 2015, already close to 2014's total of $66.8 million.
"It's been a big turnaround in total sales compared to the previous five years and we've still got 5½ months of 2015 to go," Herron Todd White's Frank Peacocke said.
Foreign investors could also feature, as they have done recently. In July, Chinese billionaire Xingfa Ma snapped up Wollogorang and Wentworth cattle stations for $47 million.
Foreign investors can own up to 50 per cent of pastoral leases in Western Australia but any amount greater than that has to be approved by the Minister for Lands and Cabinet.
