Centuria launches unlisted agriculture fund
- $177m state of the art glasshouse in Warragul VIC to seed open-ended fund
- 19-year lease over seed asset to national tenant Flavorite Group
- CAF will primarily invest as a lessor as opposed to taking operational risk
- Capitalises on sector’s growing demand for premium produce and agricultural infrastructure
Centuria Capital Group (ASX: CNI or “Centuria”) has launched an unlisted, open-ended agriculture fund, Centuria Agriculture Fund (CAF or “Fund”), which is seeded with a $177 million state of the art glasshouse in Warragul, Victoria.
CAF will acquire the Warragul glasshouse, which benefits from a 19-year sale and leaseback, triple-net lease to well regarded Australian vegetable provider Flavorite. Flavorite is the largest glasshouse producer of fresh fruits and vegetables in Australia and has 25 years of experience in this industry.
The Flavorite facility is a climate-controlled, protected cropping facility covering 33.5 hectares or approximately 40% of the total site and is one of the largest glasshouses in Australia.
The property is the Fund’s first asset of an anticipated larger, highly selective Australian agricultural portfolio. CAF will target assets leased to experienced agricultural operators as well as associated agri-logistics assets with correspondingly favourable lease terms.
Jason Huljich, Centuria Joint CEO, continued, “CAF intends to carefully partner with select operators who have a strong track-record in producing high-yielding produce and who are well established with extensive experience throughout various weather cycles.
“The Fund has a two-prong investment strategy. It will primarily focus on Precision Farming assets, such as glasshouse production, netted crops, vertical farming and properties with access to water, substrate growing and automated harvesting. Secondly, we will target assets aligned to the agricultural supply chain, such as processing, storage/cold storage and distribution to meet the paddock-to-plate demand. This remit includes both existing assets as well as those where farming operations can be expanded or improved through capex funding.”
John McBain Centuria Joint CEO, said, “Centuria branched into the agriculture sector following our merger with Primewest in July 2021 and we intend to expand this vertical to capitalise on the growing demand for premium agricultural products. Strong fundamentals that underpin the sector include population growth forecasts, which increase demand for food domestically and internationally, robust free trade agreements supporting exports, and an $80.4 billion1 gross value agricultural production forecast for 2022, contributing approximately 2% to Australia’s GDP2.”
CAF’s launch will complement Centuria’s existing agriculture trusts. In total, Centuria manages seven agriculture properties worth a collective c.$343 million3.
Based on the Fund’s initial asset, CAF has a starting distribution yield of 5.25 cpu4 and will aim to provide monthly distributions5, a limited quarterly withdrawal facility6, and daily unit pricing. It has a minimum entry investment of $10,000. Centuria will seek to raise c.$103 million to launch the Fund. Applications for units in CAF must be made pursuant to a PDS which is available on Centuria’s website at https://centuria.com.au/caf.
1 Agricultural overview: June quarter 2022 – DAWE
2 Source: Agriculture, forestry, and fishing, value added (% of GDP) – Australia | Data (worldbank.org)
3 Data as at 30 June 2022
4 The initial distribution rate is the distribution budgeted to be paid for the first month post the launch of the Fund in August 2022, annualised (assuming equal monthly distributions). Actual distributions for subsequent months will be updated on Centuria’s website. The payment of distributions is not guaranteed and subject to the assumptions and risks in the PDS
5 Centuria Property Funds Limited intends to pay monthly distributions and will be subject to the terms set out in the PDS.
6 Withdrawals are limited to the terms detailed in the PDS and are subject to the Fund’s liquidity policy and summarised on Centuria’s website. The ability of the Fund to offer monthly withdrawals is not guaranteed
Centuria Capital Group secures a $70.6 million industrial logistics facility in North Rocks, NSW, on behalf of US private investment firm, Starwood Capital’s, Last Mile Logistics Partnership (LMLP).
Centuria Capital Group has successfully exchanged conditional contracts to divest two adjoining industrial facilities located at 114 and 120 Old Pittwater Road, Brookvale NSW, which is anticipated to deliver a forecast 13.8% IRR to the assets’ closed-ended fund investors.