Shimao Chairman Selling $199M Aussie Ranchland Portfolio to AIMCo JV

Ben Hawkins, head of infrastructure & renewable resources at Alberta Investment Management (AIMCo)

The billionaire chairman of embattled Chinese developer Shimao Group has agreed to sell an Australian cattle ranch portfolio to Canada’s Alberta Investment Management (AIMCo) and a unit of Australian agricultural investment manager New Forests, as his company continues to struggle to repay debts of $11.8 billion.

Hui Wing Mau, who is a Chinese-Australian dual citizen, put the 2.9 million hectare portfolio up for sale through a public tender in October at a reported asking price of A$250 million ($166 million). While financial terms of the transaction were not disclosed, local media reports indicate that AIMCo and New Forests paid at least A$300 million ($199 million) for the collection of properties.

“The Kimberley Cattle Portfolio, AIMCo’s first investment in this sector, is an established and well-managed asset that provides important diversification in our client portfolios,” said Ben Hawkins, head of infrastructure and renewable resources at AIMCo in a press release. “We are very pleased to continue our partnership with New Agriculture, which will contribute its deep asset management and sustainability expertise as we seek to achieve both positive investment returns and community impact.”

Hui’s disposal comes as his Shimao Group has been marketing for sale a range of office, hotel, residential and other assets estimated to be worth RMB 77 billion ($12 billion), including properties in mainland China, Hong Kong and other jurisdictions, since initiating a liquidity campaign in December 2021, according to media reports.

Harvesting Returns

Located in the Kimberley region of Western Australia and covering an area nearly the size of Belgium, the portfolio comprises seven pastoral leases spanning 1,828,692 hectares and five sub-leases across 924,325 hectares. The portfolio also includes a 153,475 hectare agistment agreement under which the new owners will receive compensation for sheltering livestock owned by external parties.

Part of the cattle ranch portfolio acquired by AIMCo and New Forests (Image: New Agriculture)

The transaction marks AIMCo’s latest move as a relative latecomer to the Asia Pacific region compared to its Canadian pension peers, with the Alberta provincial pension manager opening a Singapore office in September and bringing onboard GIC managing director Kevin Bong to lead its Asia ramp-up. The fund manager managed C$158 billion ($116 billion) of global assets as of December 2022.

The deal marks the latest collaboration in Australia’s agricultural sector between AIMCo and Sydney-based New Forests following their joint acquisition of the 100,000 hectare Lawson Grains farmland portfolio from Macquarie Infrastructure and Real Assets in September 2021. The partners first teamed up in January 2011 to acquire 2,500 square kilometres of forest and agricultural land across six Australian states.

The Kimberley purchase was conducted through New Forests’ New Agriculture subsidiary, which the company set up in August 2022 to manage the Lawson Grains purchase. New Forests managed A$11 billion ($7.3 billion) of agriculture and forestry assets across 1.3 million hectares as of June.

“Kimberley Cattle Portfolio offers a key opportunity to manage for strong investment outcomes alongside leading sustainability objectives,” said Bruce King, director of New Agriculture. “Our intention is to apply the same level of rigour and commitment to sustainability that New Forests has in the forestry space to the agriculture sector. New Agriculture will continue to focus on sustainability practices which allow for not only the protection and restoration of landscapes, but which also lead to the enhancement of natural capital over time.”

The transaction is subject to approvals by Australia’s Foreign Investment Review Board and the Western Australia Lands Department, which the partners expect to be cleared by the first half of 2024.

Clearance Sale

The sale marks the latest setback for Hui, whose Shimao Group is part of a long list of Chinese developers which have defaulted on their debts amidst the mainland’s ongoing property market slump. The Shanghai-based builder has rushed to sell down its holdings and suffered asset seizures by creditors after defaulting on $11.8 billion of offshore bonds in July last year.

Hui Ming Mau (Xu Rong Mao), chairman of Shimao Group

In November, a court auction for the undeveloped Shimao Shenkong International Centre project in Shenzhen failed for the second time after receiving no bids. The RMB 10.4 billion ($1.4 billion) asking price was a 20 percent discount to the RMB 13 billion ($1.8 billion) starting price in an earlier auction attempt in July. The price in that first auction attempt was already 20 percent below the project’s appraised value, according to media accounts.

The company has put everything on the block, with recent asset sales including a London office building, a stake in a Nanjing mixed-use project, stakes in two Beijing residential projects, the Hyatt on The Bund in Shanghai, as well as a stake in Hong Kong’s Grand Victoria residential project.

Hui, who holds an MBA from the University of South Australia, began building a cattle empire in Australia in 2017 through a series of ranch purchases as well as spending A$120 million to acquire a 51 percent stake in Australia’s fourth largest beef processor, Bindaree Beef.

With Shimao’s share price having fallen 97 percent since January 2021, Hui fell to 19th place on the Australian Financial Review’s 2023 Rich List with a net worth of A$4.9 billion, down from his fourth place ranking and net worth of A$18.1 billion in 2020.

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