Australia’s largest irrigated cotton property, Cubbie Station, is back in local hands after Chinese textile giant Shandong Ruyi sold its remaining stake to co-owner Macquarie Asset Management.

Cubbie Station is responsible for around 10% of the country’s cotton output and is now entirely held by the Sydney-based company.

The sale of the 51% stake also includes Cubbie Station’s associated properties and cotton ginnery. There are 93,700 hectares of farmland, including 22,100 hectares of irrigated cropping and 13,300 hectares of on-farm irrigation infrastructure, while it has nearly 500,000ML of irrigation entitlements.

Shandong Ruyi paid $232 million 10 years ago to take control of Cubbie Station, near Dirranbandi and St George on the border of Queensland and NSW. At a time of concerns around foreign ownership or agribusiness assets, then-Labor Treasurer Wayne Swan approved the deal on the condition they sell down their stake from 80% to 51% within three years.

That was extended by another three years in 2016 by Prime Minister Scott Morrison – who was then Treasurer – and Macquarie took on a 49% stake in 2019. At that time, the co-owners committed to a voluntary water contribution of up to 10GL to the Culgoa River and Lower Balonne intersecting streams in support of the Northern Murray Darling Basin. In a statement announcing the latest deal, Macquarie Asset Management said there would be no change to the contribution.

“The change of ownership will not materially change the day-to-day operations of Cubbie,” the statement said.

Shandong Ruyi spent $26 million maintaining and improving efficiencies and more than $25 million acquiring and upgrading the Dirranbandi ginnery.

When it took on the 80% interest, the balance was held by Melbourne-based Lempriere. That stake was absorbed into the Shandong Ruyi business, and Roger Fletcher took on 20%.

Shandong Ruyi has been faced with a number of financial challenges as it seeks to become a major player in the luxury retail sphere. It defaulted last month on a loan it used to acquire Lycra Co.

Macquarie Asset Management takes full control of the property at a time in which cotton prices have doubled in just three years. The Reardon family is looking to take advantage of the conditions with the sale of the Worral Creek Aggregation in Queensland, with expections of $400 million. Similar to Cubbie Station, Worral Creek is tipped to account over for over 10% of this year’s national cotton crop.

Canada’s Public Sector Pension Investment Board and the Robinson Family’s Australian Food & Fibre  last year acquired cotton producer Auscott for about $500 million.

Cotton trade patterns  are not expected to impacted heavily by Russia’s invasion of Ukraine, but the sector remains prone to impacts stemming from factored in, and potentially stronger, price increases for fertiliser and energy. Higher inflation will also be weighed into market positions, according to Rabobank.