- The fund was launched at the beginning of FY23
- Centuria's total agricultural AUM is some $500M
- The existing tenant has entered a new, extended lease on a 15-year term
Centuria Capital Group (ASX: CNI) recently announced it secured a 20-hectare tomato glasshouse facility in Guyra, New South Wales, on behalf of its unlisted, pure-play Centuria Agriculture Fund(CAF).
Acquired from a family-owned investment office, off market, the transaction takes CAF’s glasshouse under management to circa 74 hectares under glass, worth $323 million with a WALE exceeding 18 years.
CAF was launched at the commencement of FY23, seeded with a $177 million glasshouse in Warragul, Victoria, acquired on a 19-year sale and leaseback, triple net lease to Flavorite.
The transaction takes Centuria’s total agricultural assets under management to $500 million, up from $343 million as of 30 June 2022 book value (approximately at the time of CAF’s launch).
Centuria Joint CEO, Jason Huljich, explained that the company 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. 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,” he said.
The 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 vegetables 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.
Andrew Tout, Centuria’s Head of Agriculture, said, “In just over six months, CAF has secured three high-value, off-market glasshouse assets worth more than $323 million. 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.
“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.”
