This article is from the Australian Property Journal archive
CENTURIA Capital has forked out $80 million to acquire another glasshouse facility for its unlisted agricultural asset fund, citing the importance of food security that has been highlighted by COVID and geopolitical events.
Its newest purchase is a 20-hectare tomato glasshouse facility in Guyra, in the NSW Tablelands.
The deal, with Costa Asset Management, takes the total size of its glasshouses under management – within unlisted pure-play Centuria Agriculture Fund (CAF) – to 74 hectares under glass, worth $323 million, with a weighted average lease expiry of more than 18 years.
“In recent years, the pandemic and other climatic and geopolitical events have highlighted the importance of food security and access to non-discretionary fresh produce,” said Andrew Tout, Centuria’s head of agriculture.
“Australia is also reputed for being a ‘clean and green’ producer of high-quality agricultural products and demand for Australian grown fresh food and other quality agricultural products is forecast to increase materially over the next 10 years, driven by middle-class population and income growth in both local and offshore markets.
Centuria is Australia’s biggest large-scale glasshouse landlord. The deal follows December’s $70 million acquisition of a facility in South Australia’s Port Augusta operated by major truss tomatoes grower Sundrop Farms, and the mid-year $177 million purchase of a glasshouse facility in Warragul, Victoria, as a seed asset.
At the Guyra facility, existing tenant Tomato Exchange has entered a new, extended lease on a 15-year term, triple-net lease with CPI-linked rent reviews.
In addition to the 20-hectare glasshouse, the asset includes a one-acre nursery, 65 megalitre dam, packing and distribution sheds and cool rooms.
Tomato Exchange produces 12,800 tonnes of tomatoes from the asset each year and is a wholly owned subsidiary of ASX-listed Costa Group, Australia’s largest grower, packer and marketer of vegetable and fresh fruit. The parent company has long-standing relationships with major blue-chip fresh produce retailers across Australia including Coles, Woolworths, Aldi, Costco and Harris Farms.
“Centuria has expressed its intention to strategically grow its platform across alternative real estate sectors, including agriculture. We believe strong demand fundamentals will drive continued investor interest in agricultural real estate and Centuria will continue to seek high quality assets, leased to reputable operators with strong sustainability credentials in high revenue producing sectors such as protected cropping,” Jason Huljich, Centuria joint CEO, said, and flagged further agricultural acquisitions.
“We have developed a healthy acquisition pipeline of assets which suit the CAF investment profile and expect total agriculture AUM to exceed $600 million during FY23 and continue to grow rapidly in FY24.”
CAF anticipates a distribution yield of 5.25c per unit, monthly distributions, a limited quarterly withdrawal facility, daily unit pricing and a five-year liquidity event. It has a minimum entry investment of $10,000.
The acquisition increases Centuria’s total agricultural assets under management to $500 million.
