Eildon Capital Group has entered a joint venture to acquire a large sandalwood plantation in Queensland’s Burdekin Irrigation District, while unveiling a strategic update to its operating model aimed at driving disciplined growth and enhanced returns.
- Joint venture with AAG Investment Management to acquire 1,835-hectare sandalwood plantation
- Eildon holds 90% equity stake, funded by equity and bank debt
- Plan to convert land for sugarcane farming and operate as long-term agricultural enterprise
- Strategic operating model update targeting 10%+ returns and cost discipline
- $3.3 million on-market buyback completed since April 2025
New Joint Venture in Burdekin
Eildon Capital Group (ASX – EDC) has announced a significant new joint venture with AAG Investment Management Ltd to acquire a substantial sandalwood plantation and associated water rights in the Burdekin Irrigation District of North Queensland. The 1,835-hectare property, located approximately 60 kilometres south-west of Ayr, represents a strategic entry into one of Queensland’s premier irrigation regions known for tropical grains, oilseeds, and sugarcane cultivation.
Under the terms of the venture, Eildon will hold a 90% equity stake, funded through a combination of equity and bank debt, while AAG will hold the remaining 10%, financed via a secured loan from Eildon. The joint venture has already entered into contracts to acquire the Millaroo Dalbeg Plantation and associated water allocations, with completion expected by September 2025, subject to regulatory approvals and transfer of water rights.
Operational Plans and Investment Horizon
The venture intends to convert the existing sandalwood plantation into land suitable for sugarcane farming, reflecting a pivot towards a long-term agricultural enterprise. The management role, undertaken by AAG, includes remediation of the land and disposal of non-core assets to optimise the property for sugarcane cultivation. The investment is planned over a three-year horizon, with the joint venture aiming to realise value through asset sales and operational improvements.
This move aligns with Eildon’s broader strategy of focusing on select Australian agricultural opportunities that offer strong return potential, particularly in regions with established irrigation infrastructure and crop diversity.
Strategic Operating Model Update
Alongside the joint venture announcement, Eildon Capital revealed a comprehensive update to its operating model following a strategic review completed in August 2023. The revised approach emphasises disciplined capital allocation, cost efficiency, and enhanced transparency for securityholders. Key priorities include concentrating investments on a select number of high-quality opportunities, targeting returns exceeding 10% above prevailing cash rates, and maintaining a portfolio balanced between yield and capital growth assets.
To support this, Eildon forecasts operating and corporate costs of approximately $3.8 million per annum from fiscal year 2026, reflecting a streamlined cost base. The group has also undertaken an on-market buyback program, repurchasing around $3.3 million worth of securities since April 2025, signaling confidence in its valuation and capital management strategy.
Looking Ahead
Eildon’s joint venture in the Burdekin region and its updated operating model mark a clear pivot towards focused, value-driven agricultural investments. The success of the sandalwood plantation conversion and the timely completion of regulatory steps will be critical to unlocking the venture’s potential. Meanwhile, the operating model update positions Eildon to better navigate market conditions and deliver sustainable returns to investors.
Bottom Line?
Eildon’s strategic moves set the stage for growth, but execution risks and regulatory timing remain key watchpoints.
Questions in the middle?
- Will the regulatory approvals and water allocation transfers proceed on schedule by September 2025?
- How effectively can the joint venture convert sandalwood plantation land to sugarcane farming within the planned timeframe?
- What impact will the updated operating model have on Eildon’s future deal flow and portfolio composition?