Upping the ante at Grong Grong

Serious investors are being courted to run their calculators over an ambitious horticultural development opportunity now on offer in the Riverina. CBRE is marketing an investment package labelled “Grong Grong Estate”, which is an aggregation of 28 properties just north of the Murrumbidgee River, about 25 kilometres east of Narrandera.

The initiative is part of a wider plan called the Droughtmaster Project aimed at delivering piped water to rural and industrial users (including the Ardlethan tin mine) across the northern Riverina. It’s being driven by an unlisted public company called Plains Water Ltd, which sees the development of an irrigated horticultural venture at Grong Grong as a key component of the proposed water scheme.

A vital first stage of the process was reaching agreement with enough owners of adjoining properties to create a land sale package of sufficient scale to attract a major developer/investor.

The result is a sale aggregation of 28 individual farms, all but two of which are contiguous, totalling 7495 hectares (18,512ac) and owned by eight different vendors (some of multiple entities).

Vendors range from older farmers ready for retirement, to younger farmers who intend to continue farming elsewhere if a sale eventuates. All are motivated by the recognition that an intensive horticultural development, in an area now characterised by dryland farming and grazing, would provide a huge economic stimulus to the region.

The concept of vendors banding together to make a sale to a “big ticket” buyer is not new. A recent example was the sale of 20 properties in the Coonamble district as a single bundle called “Urawilkie Aggregation” to Hassad Australia in 2014.

If the Grong Grong development goes ahead, it will be another step in the progressive transformation of agriculture in the Murrumbidgee Valley to more intensive land and water use.

Already large areas nearby are now being developed by institutional or corporate owners including Paraway Pastoral Company, Westchester, Webster, Select Harvests and Rural Funds Group.

Land use is changing from the time-honoured wheat/rice/grazing model to higher-value row crops like cotton, and permanent plantings which are better able to justify the rising cost of water. Of the total area involved in the Grong Grong package, 6370ha or 85 per cent is described as arable, and an independent assessment has found that 5117ha would be well suited to intensive horticulture.

Soils across the aggregation range from red sandy loams to grey clays and light sandy clays, all free draining, and combined with the region’s Mediterranean climate, makes it an ideal environment for almonds, walnuts, pecans, citrus or grapes.

The aggregation is location adjacent to the Murrumbidgee River and the Bundidgerry Channel (pictured), from both of which sources irrigation water would be drawn. Investors would have the option of negotiating water supply from the Droughtmaster Project (in which they can also become investment partners) or organising their own water supply infrastructure.

Vendors of the properties making up the aggregation have indicated a willingness to lease back any land not required by a new owner for immediate development, thereby helping to defray up-front costs. Expressions of interest for “Grong Grong Estate” will close on June 6, with the deadline for final and binding offers expected to be July 26.