This article is from the Australian Property Journal archive
THE strong performance of farmland property has prompted Primewest to eye off a $350 million float of its agricultural trust which is already on the lookout for investments in almonds, tomatoes and vineyards asset classes.
The listed fund manager is tapping investors for $55 million to fund cornerstone investments in the Primewest Agricultural Trust No. 1 (PAF), and in its new Primewest Property Income Fund (PPIF).
It has expanded the mandate of PAF, which launched last year with an initial target asset size of $100 million and acquired a major landholding on Victoria’s Mornington Peninsula for $42 million. The trust’s mandate has now been muscled up to $350 million.
“We are now in active discussions with a number of vendors in a wider range of agricultural classes including almonds, tomatoes and vineyards,” Primewest managing director, David Schwartz said.
“PAF will seek to acquire these assets in the coming months should they satisfy our due diligence protocols.
“Primewest will also explore the potential to list this fund on the ASX in due course.
“We are confident that these funds will be attractive to our existing investors and will also provide an opportunity to attract a broader investor universe over time.”
Primewest appeared set to use the Vitalharvest Freehold Trust that it took over during winter as the springboard for a listed agricultural trust, but Vitalharvest is set to be taken over by Macquarie in a $300 million acquisition that has been supported by Primewest.
Meanwhile, Primewest is targeting $150 million in assets over the next 12 months for its open-ended PPIF, which launched last year with $30 million in assets under contract.
“We have been exploring the launch of an open ended investment fund for some time. The launch of Primewest Property Income Fund will provide our investors with the benefits of the Primewest investment process whilst having access to liquidity over time,” Schwartz said.
The fully underwritten institutional placement to raise $55 million through the issue of approximately 43 million new securities will be offered at an issue price of $1.27 per security, representing a 5.9% discount to the last close price, and 8.6% discount to the five day VWAP.
Primewest provided a full year distribution guidance of 5.0 cents per security.
During the first half, Primewest’s assets under management grew by 8.5% to $4.9 billion with a further $134 million under contract. It closed the year with the $92 million purchase of shopping centres in Western Australia and Queensland, and the $70 million purchase of Melbourne Square.
Unaudited operating earnings per security was 2.1 cents and pro forma cash balance $26.5 million with no debt.
Primewest grew its daily needs assets exposure to over $930 million and launched Primewest Bespoke, which manages $170 million in assets.
