Weekly Property Review: Boulia region is sweet cou...

THIS week’s property review explores an area described as among the best low-rainfall beef producing regions Australia. It also examines some recent listings and sales in the area, and what the experts say about values.

Boulia is located 1700km northwest of Brisbane and 300km south of Mount Isa along the Burke River.

Boulia has been described as being at the headwaters of the Channel Country of western Queensland where, following rain events, river and creek channels fill with water and spread over expansive areas. When it does rain heavily, the Mitchell grass plains respond magnificently.

Tom Brodie from the Winton-based Brodie Agencies calls the Boulia country ‘sweet.’

“It is beautiful fattening country and the cattle eat everything. Its strength is its potential to fatten over a longer period of the year compared to the downs country,” Mr Brodie said.

“When there’s a good season, a property with river channels running through it can get producers and cattle through the dry times for around two years.”

Mr Brodie said while the Boulia area was low-maintenance and low-cost country, it also experienced low rainfall.

“Boulia doesn’t have a big season every year – maybe every three or four years – but the strength of the soil structure allows it to hold moisture longer. As a result, the quality of the feed is maintained, and any winter rain promotes herbages which are good fattening feed.”

A Boulia aggregation spanning 423,000ha is being taken to an expressions of interest campaign by Brisbane-based Colliers International.

Comprising the 208,000ha Roxborough Downs, located 80km west of Boulia, and the 215,000ha Mudgerebar Station, 135km south of Mt Isa, the adjoining properties are run as one operation.

The offering is surrounded by ‘tier-one corporate and family owners’, which head of agribusiness and transaction services, Rawdon Briggs said is a testament to the country’s productivity.

“Roxborough Downs and Mudgereba Station were once owned by the North Australian Pastoral Co and are neighboured by AA Co and MDH holdings. If those properties weren’t performing, they would have been divested decades ago.”

Mr Briggs said long-term Boulia owners were conservative in their stocking habits and played the long game.

“Roxborough and Mudgereba have never been destocked. They have carried big numbers right through what everyone has described as one of the most challenging droughts they have ever seen.”

“The cattle have performed exceptionally well. In fact, the vendor will commence mustering in the latter part of winter through to early spring and from what I seen, the weights are pretty amazing,” he said.

He said the channel country was known for its ability to fatten or background cattle to target weights, like no other region.

“The lighter red soil country on Mudgereba complement the channel country areas, and after the last rain event performed very well. It also responds well to smaller rainfall events year-in, year-out.”

Mr Briggs said the country had numerous selling points.

“It has Organic production potential, is low maintenance and tick free. It is serviceable from Mount Isa (a four-hour drive) and it is cheaper to run an operation here compared to parts of the Northern Territory.”

He suggested land values around Boulia had risen by about 20 to 30 percent since 2015, with the initial uplift occurring in 2016 and flattening out in 2017-18.

“The Boulia region now represents some very good value in the market, given what has happened (price wise) to the downs country to the east, the buffel grass country in Central Queensland and strong land values in the NT.”

Mr Briggs said the region also gave producers more options for their cattle.

“The advantage of this region compared to the NT is that producers are not completely reliant on the a single live-ex trade business. Boulia landholders can target the boxed beef supply chain or can go to Darwin or Townsville live-ex markets,” he said.

Roxborough Downs and Mudgereba are attracting interest from producers seeking scale, expansion or an opportunity to enter the beef market. There are also Gulf breeding operators looking for a Channel block to finish or background their steers on, and NT breeders seeking nearby tick free land holdings.

In other recent local listings, the 50,000ha cattle backgrounding depot, Dover Station, 135km north east of Boulia near Middleton, has also hit the market with a $6.8m (bare) price tag.

Dover is attracting good inquiry from dry areas of the NT and western Queensland, as well as from producers that are not necessarily in the market to buy, but understand the country type and the price.

Tom McLeish from TopX Australia said Boulia country was known for its unique qualities.

“It is naturally clean and nutritious, and is not minerally deficient. Cattle do well on it in terms of weightgain – both for growing and finishing. While there is not much feed to look at, the cattle are in good condition because what feed is available is almost 100 percent edible.”

Many cattle stations around Boulia are held by established family operations, some whom had been there for more than 100 years, keen to expand their holdings.

Two years ago, Boulia’s Westward Ho sold at auction for $5.24m. The 50,000ha Certified Organic cattle station was purchased by Adrian Wells from the neighbouring Elrose Station for $105/ha.

More recently, Mudgeacca Station was secured by Boulia mayor Rick Britton who also owns Goodwood, Lucknow, Black Mountain and Scarsdale.

Mr McLeish said corporates had also secured expansive tracts of country across Western Queensland, the NT and the Gulf for breeding purposes.

“They can drop their growing cattle to Boulia for a couple of years until they are fat or at feeder weight,” he said.

Pat Lyons from valuation firm Taylor Byrne agrees, noting that some of the latest purchases in the region had been from outsiders.

“Producers are taking the opportunity to buy large tracts of safe breeding country in an area that has been under-appreciated for quite some time. Most importantly, it has top feed and cattle can be kept alive in dry spells. That has been problematic on the downs country,” Mr Lyons said.

In August 2016, the 688,000ha Manners Creek Station, 260km from Boulia, sold to Gibson Grazing for $15m (just under $22/ha) including 11,000 cattle.

The cattle operation, which failed to sell at auction, was snapped up soon afterwards by Michael Gibson and family, providing them with new access to the Darwin and Townsville live trade as well as slaughter markets.

Mr Lyons said most of the region’s recent sales activity had occurred around Middleton, a stretch of country between Boulia and Winton.

“This is partly due to the seasonal conditions and partly because it is reasonably valued country that slipped under the radar for a number of years,” he said.

Twelve months ago, the tables turned with the sale of the 182,481ha Brackenburgh Aggregation near Middleton. It sold under the hammer for $22.25m including 5000 head of mixed breeding cattle, as well as comprehensive plant and equipment, through veteran property agent David Tannock.

Two months ago, Peter Hughes from Georgina Pastoral Co paid what was considered an extraordinary $11m ($90/ha) for the 121,400ha Cawnpore Station, located east of Boulia and 240km west of Winton.

Extraordinary because the recent sale of the nearby large-scale cattle breeding and fattening /backgrounding aggregation, Boolbie & Archervale, at almost double the size (220,000ha), sold for $10m ($45.50/ha).

The transaction is believed to have been a private one between Mr Hughes and Cawnpore vendors, the Kerr family. The pressure for grass is believed to have forced the sale of Cawnpore, with the Hughes family’s Barkly holdings Lake Nash, Georgina Downs and Argadargada very dry, and perhaps explaining the why such a high price was paid for the property.

Winton agent Tom Brodie believes long standing family operators are prepared to pay a premium to secure a neighbouring or local property.

“Few people want to live that far west. They are daunted by it. Outsiders don’t understand the country and don’t have the experience. It is the locals who run the country accordingly.”

“Lower rainfall means higher-risk country, but the success of the local producers is that they manage their stock numbers well,” Mr Brodie said.

On Wednesday last week, the 74,600ha Tulmur aggregation betyween Middleton and Winton on the Diamantina River was passed in for $6.6 million ($88/ha) through Elders. An earlier auction date was postponed, after the country received 375-560mm of rain. The enterprise is estimated to carry 3000 breeders plus followers. Agents remain hopeful of completing a sale.

It has been suggested that Boulia land values have risen by 20 percent since 2015, and now range between about $75 and $150/ha, depending on size and quality.

The experts believe the figure is not far off the mark. Given the variation in the country types, some better properties would obviously attract more, while others would achieve less.

With only two Boulia properties currently on the market, market watchers will be interested to see the outcome of Dover and Roxborough/Mudgereba.

Just 18 months ago, John and Kate McLoughlin paid $8.25m for the 215,000ha Mudgerebar – which at the time was considered a good result, reflective of the rising market.

Valuer Pat Lyons believes the two sales will give a good indication of where the Boulia region property market is headed.

“I expect strong demand following a reasonable season. I am anticipating equivalent values to other recent district sales (such as Brackenburgh and Boolbie & Archervale),” he said.

“Boulia has become more attractive because it is traditional cattle country, better suited to breeding than the open downs country.”