Centuria Capital Group has announced the acquisition of an agricultural property in Warragul, VIC for $177m.
The property is leased to Australia’s largest glasshouse operator, Flavorite Hydroponic Tomatoes, part of the Flavorite Group, which supplies blue-chip retailers Coles, Woolworths, Aldi, CostCo and Harris Farm.
It is a premium, investment-grade agricultural property, providing a stable income stream with a 20-year “triple- net” lease back covenant.
The property was marketed by Colliers International Director of Agribusiness James Beer who described the investment opportunity as an “attractive 20-year triple net lease with four, five-year options and a commencing rent of $10 million per annum, with fixed increases of 3% per annum.”
On this basis, the Centuria deal equates to a passing yield of 5.6%.
Centuria will immediately acquire 50% interest in the property with Flavorite Group retaining the remaining 50%. Centuria will however acquire the remaining 50% on the same terms within a six-month period, during which time, Centuria propose to launch a new fund vehicle which to hold the entire asset.
The acquisition expands Centurias’ reach into Agricultural assets and marks their largest acquisition in the sector so far. The Group hold 4 assets in 2 Centuria controlled Primewest Funds worth $94m.
Jason Huljich, Centuria Joint CEO, said, “high-quality, rare-to-market acquisitions illustrate Centuria’s strong transactional capabilities and ability to expand its real estate platform with assets underpinned by excellent leasing covenants.
The move into agriculture is a strategic one for Centuria, who believe that the commercialisation of the market and the efficiency gains to be made by primary producers will result in strong stable cash flow from high quality operator tenants.
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