A significant parcel of water in Queensland will be sold on AuctionsPlus later this month, as investor confidence returns to the water market.
The entitlement - 1,000 ML of High Priority and the option for 600 ML of Medium Priority permanent water entitlements on the Burnett River system, Bundaberg - offers prioritised annual water supply, suitable for both agricultural and industrial use.
Matthew Tolmachoff from Colliers Agribusiness Water Advisory and Transaction Services, which is offering the entitlement, said the water market was showing renewed strength.
“Market interest in permanent water entitlements is gaining momentum as interest rates decrease and investor confidence returns," Mr Tolmachoff said.
"This offering presents a strategic opportunity to secure a reliable water source in a region renowned for its fertile soils and strong horticultural output.
"As interest rates have been decreased and are forecast to decline further in the second half of the year, securing water entitlements now could provide a strategic advantage."
Mr Tolmachoff said water allocations and permanent entitlements will continue to underpin the reliability of any farming enterprise and will continue to grow in value due to the utility and market liquidity they have.
"Water transactions separate to land will offer investors and farmers alike to add reliability of water supply into their production base by increasing entitlement," he said.
He referred to Sunwater data that shows High Priority water entitlement licenses in the Burnett had achieved 100 % reliable allocation in all years based on its high priority status, (except 2007, it was 85% vs Zero for Medium Priority).
“With the Commonwealth’s water buyback program reshaping supply in the Murray-Darling Basin, Queensland, and particularly the Burnett region, is well-positioned to benefit from increased demand. High Priority water entitlements like this one are becoming increasingly scarce, and their reliability underpins long-term agricultural productivity and investment returns,” Mr Tolmachoff added.
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The Bundaberg Irrigation Scheme is supported by the Burnett River, and the region’s free-draining rich loam soils, coastal climate, and proximity to key infrastructure make it a hub for permanent horticulture, such as macadamias.
Bundaberg’s robust economy, fuelled by thriving sectors in agriculture, is surpassing both state and national growth rates. The region is experiencing a surge of more than $5.8 billion in projects and new investments, particularly in agriculture, manufacturing and renewable energy, positioning it to become Australia’s leading regional community.
He said family farms, corporates, and investors were all active in the market.
"Much of the vegetable and sugar cane production in the area has its roots and continuing foundation firmly in the family business," he said.
"Whilst the upcoming generation of farmers are now taking control of the family farm, they are increasingly seeking a slice of the investor funds that are available in agriculture. This has led to new partnerships fostering a new model of management and the involvement of hands-on farmers with corporate investor funds and the fiduciary structure they offer.
"The lifecycle of these investments is typically long and that has led to a focus on permanent tree nut plantings offering an exceptional return per megalitre of water used."
The water entitlement is offered for sale via online auction on Thursday, September 18 at 10am (AEDT).
The High Priority allocation is in the CA Zone of the Burnett River and is available for transfer in one line or in parcels of 100 ML.
