Primewest takes charge of berries and citrus trust
Primewest has ramped up its push into income-producing rural property assets after taking charge of the ASX-listed Vitalharvest Freehold Trust, which owns $275 million worth of citrus and berry farms leased to fruit and vegetable grower Costa Group.
The listed real estate fund manager paid $10 million to acquire Vitalharvest’s external manager, goFARM Asset Management and a further $19.26 million to become the trust’s biggest shareholder with an 11.8 per cent stake.
Primewest has also acquired a right of first refusal over a further 6.2 per cent interest in Vitalharvest. It plans to grow the trust’s asset base through the acquisitions of additional farms and agri-logistics assets.
“The real agricultural property and agri-logistics sector is an exciting sector with strong fundamentals,” said Primewest managing director David Schwartz,
“By expanding our investment opportunities to include the broader food supply chain, we believe we can attract a broader investor universe to support the fund’s growth.
“We aim to create Australasia’s leading pure-play agri-chain A-REIT, which leverages Australia and New Zealand’s position as a leading global agricultural supplier,” Mr Schwartz said.
Primewest launched its inaugural agricultural trust last month, seeded with a 425-hectare property near Deniliquin leased to fruit and vegetable processor Kagome, with plans to spend up to $100 million on agricultural assets.
More broadly, institutional investors are seeing value in rural assets tied to food production with Macquarie’s Viridis Ag and fund manager Stafford Capital among those making acquisitions.
Vitalharvest’s manager, goFARM Asset Management, is jointly owned by goFARM managing director Liam Lenaghan’s Lenaghan Investments and Costa Asset Management, the investment office for the families of Robert and Anthony Costa.
The trust was spun out of Costa Asset Management in June 2018 at $1 a share.
Mr Lenaghan told The Australian Financial Review Primewest had made an unsolicited approach to acquire all the shares in goFARM Asset Management.
“There’s plenty of goodwill between the parties and the potential for a longer term strategic partnership as goFARM’s main business is the development of investment-grade agricultural assets,” he said.
He added that a rental dispute between Costa Group and the trust had “effectively been resolved”.
Vitalharvest’s earnings crashed 29 per cent in the six months to December due to the impact of drought, bushfire, pestilence and crumbly berries.
Primewest said it would seek investor support to rename Vitalharvest as the Primewest Agri-chain Fund.
