This article is from the Australian Property Journal archive
PRIMEWEST, the $4 billion property fund manager, is diversifying into the agricultural sector targeting counter-cyclical opportunities and acquiring its first investment in the NSW southern riverine region.
The newly launched Primewest Agricultural Trust No 1 has paid $4.8 million for Pinegatta, a 425 hectare property, which is leased to blue chip tenant Kagome – Australia’s largest fruit and vegetable processor with a market capitalisation in excess of $2 billion.
The Pinegatta property, near the town of Deniliquin, primarily produces carrots and potatoes, most recently servicing contracts to the Smith Snack Food Company (Pepsico). It consists of fertile, rolling loam soils with a state-of-the-art irrigation system that is connected to highly reliable water resources via deep bores and the Mulwala Canal – Australia’s largest irrigation canal which is less than a kilometre away.
Primewest director David Schwartz said has taken a counter-cyclical approach to investing in the agricultural sector, with plans to acquire a range of properties in its new trust totalling up to $100 million.
“Pinegatta was a high quality, investment grade, agricultural asset leased to a blue chip tenant and was well positioned to benefit from the anticipated improvement in the Australian agricultural sector.
“Kagome has invested around $700k on capital improvements to the property in the last 12 months and its also features $1 million worth of central irrigation pivots that span 259 hectares of land,” Schwartz said. The triple-net lease provided a WALE (by income) of 6.4 years.
