April 30, 2020

By Lynda Kiernan

Australian property investor Primewest has entered agricultural investment with the launch of a new agricultural investment vehicle, and has acquired its first ag acquisition toward what will be a $100 million plan in the asset class. 

Already with a presence in commercial, industrial, retail, residential, and tourism, Primewest has launched the Primewest Agricultural Trust No 1 to “provide Investors with an opportunity to acquire high quality agricultural investments leased to strong tenant covenants well positioned to benefit from the anticipated improvement in the Australian agricultural Industry,” according to the firm’s website. 

This newly established trust has already deployed its first capital, paying A$4.8 million (US$3.13 million) for “Pinegatta” in New South Wales. Located in the Riverina region, the 425-hectare (1050-acre) Pinegatta has been growing carrots and potatoes, supplying PepsiCo subsidiary Smith Snack Food Company.

With the acquisition, Primewest has entered into a lease agreement with Kagome, the largest tomato producer in Australia. In business since 1996, Kagome Australia grows, harvests, and processes its tomatoes in Echuca, and has grown the business to also process apples, pears, beetroot, and carrots. 

Over the past year, Kagome has invested approximately $700,000 on the property that David Schwartz, director with Primewest, told Business News Australia is “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.”

The land also includes central irrigation pivots spanning 259 hectares (640 acres), and generates net passing income of A$300,000 (US$195,561) per year, with expectations that it will drive a return on investment of 8 percent per annum.

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.