Laguna Bay buys Banongill Station for agri fund

Banongill is the first purchase for Laguna's $280 million agricultural fund. Picture: Contributed

Banongill is the first purchase for Laguna's $280 million agricultural fund. Picture: Contributed

The Laguna Bay Pastoral Company has acquired historic Banongill Station in Skipton as the first asset for its $280 million US pension fund-backed agricultural fund.

The blue ribbon 6880 hectare cropping and grazing estate was offloaded by former South Melbourne VFL footballer Stewart Gull and his wife Sue, who acquired it almost a decade ago from wool merchants. the Lempriere family.

Included in the sale were of 30,000 sheep, 2400 Angus cattle, a full complement of station plant and equipment and 1500 hectares of winter cereal cropping land. 

The price was not disclosed. Industry sources said the land alone could be worth more than $30 million at current rural values.

The sale comes as rural property values have started to rise again across the country.

"Banongill Station, not least for the scale of its operations and the quality of its infrastructure, is one of the best holdings of its type in the Western District," said Tim McGavin, co-founder and CEO of Laguna Bay.

The mixed-use property will seed the $280 million Laguna Bay Agricultural Fund 1, which invests on behalf of US pension fund giant, the Washington State Investment Board and other investors. Well-known Victorian cropper John Sheehan will operate Banongill Station.

Mr McGavin said the fund would, over time, comprise a diversified portfolio covering many sectors and regions of Australia."It's discretionary capital so we have a long time to spend the money. There are plenty of deals out there for us.

"Interest in agriculture is strong. Everyone is chasing yield and agricultural property is a good returning asset class in a low yielding world," he said.

The off-market sale of Banongill Station was facilitated by Colliers International's national director of rural & agribusiness, Shane McIntyre, who called Banongill "best in class" and the "key station in the Western District".

"The sale of Banongill Station is a standout and reflects heightened confidence in primary production from national and international interests," Mr McIntyre said.

Banongill dates back to 1853 when it was separated from Borriyalook station, owned by pastoralist and philanthropist Francis Ormond, the founder of the University of Melbourne's Ormond College.

The original 1853 bluestone cottage forms part of the kitchen in the more recent 1905-built homestead, which is surrounded by 5 hectares of landscaped show gardens designed by William Guilfoyle, the designer of the Royal Botanic Gardens.

"When we bought Banongill, the wool market was very depressed, so we thought it was important to have diversity and in particular, a stronger focus on cropping," said Mr Gull, who played 78 games for the South Melbourne Swans (now the Sydney Swans) in the 1970s.

"In our first year here, the only revenue was the wool cheque, we have created a balance of wool, fat lambs, beef and cereals."

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