Shortly after its recent merger with Centuria Capital Group and the sale of the Vitalharvest Freehold Trust, Primewest has launched a new wholesale unlisted agricultural fund that will be seeded with a $53.9 million almond farm in the Riverina region, offered as part of the Western Rosella farming portfolio.
Primewest will seek to raise $34 million from wholesale investors to fund the acquisition of the Moora almond orchard in Hillston.
The transaction provides a 12-year, triple-net lease from settlement to Lachlan River Almonds Pty Ltd, which is owned by diversified Australian investment group, Roc Partners.
Roc has substantial agricultural and horticultural businesses such as Flavorite Tomatoes and Stone Axe Pastoral Company, and had fought a bitter and protracted battle for the Vitalharvest Freehold Trust with Macquarie that was eventually won by the latter.
Primewest had acquired Vitalharvest’s external manager last year and appeared set to use Vitalharvest as a springboard for a listed agricultural trust, but has been eyeing off a $350 million float of its agricultural trust that has just picked up vineyards and orchards in Victoria and South Australia.
Primewest Agricultural Trust No. 2 will be seeded with the 524-hectare Moora property featuring 434 hectares of productive and mature almond trees. Its secure water entitlements include over 7,100 megalitres of Lower Lachlan groundwater and 700 megalitres of Lachlan Regulated River Water Source.
“The launch of our second wholesale agricultural Trust is testament to our confidence in Australia’s agricultural sector and investor appetite for these investments,” Primewest director, David Schwartz said.
“We are further expanding our footprint into the fruit and nut orchard sector and the expansive Moora almond farm will further diversify our agricultural portfolio, not just by crop type but also geographical location.”
“We have taken a counter-cyclical approach to investing in the agricultural sector, building a suite of quality agricultural investments that benefit from strong water supply. The strategy has resonated well with our long-standing investor base.”
Primewest Agricultural Trust No. 2 will provide an annual initial cash distribution of 7.0% and is open to investment by wholesale investors only.
Primewest said it has a “strong pipeline of potential future acquisitions” for the new fund.
Moora was offered last year by the $56.5 billion Harvard University Endowment Fund as part of its $120 million Western Rosella portfolio that spans 13,652 hectares across three properties within a circa 95km radius of one another. As well as Moora, they included Euroley at Euroley, measuring 2,419 hectares, and irrigation development Newmarket at Maude, which spans 10,708 hectares.
The world’s largest academic endowment fund had sold the Lachlan River properties Wyadra and Cowl Cowl to Boston-based Hancock Agricultural Investment Group for a figure north of $120 million earlier in the year.
Hancock recently picked up ASX-listed Rural Funds Group’s Mooral almond orchards at Hillston for $98 million.