January 11, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

Australian fund manager Centuria Capital Group has acquired 12 hectares of protected glasshouse and greenhouse cropping assets in South Australia through its open-ended, unlisted Centuria Agriculture Fund (CAF) for A$21.5 million (US$14.38 million).

The assets, which are operated by South Australian hydroponic vegetable producer P’Petual Holdings, comprise a total land area of 59 hectares, six hectares of glasshouses, and six hectares of double-skinned plastic greenhouses with the capacity to produce approximately 1,488 tons of tomatoes, 136 tons of cucumbers, 517 tons of eggplants, and 43 tons of capsicums per year. Also included are packing sheds, onsite energy, fertigation and reverse osmosis infrastructure, a dam, and bore water licenses. 

This deal now expands the CAF portfolio to four assets valued at A$351 million (US$235 million) with a 17-year WALE (weighted average lease expiry) and 100 percent occupancy. The acquisition also includes a Development Application approval for an additional four-hectare greenhouse, providing a value proposition via the future expansion of CAF’s size and footprint in the ag real estate sector. 

Centuria Capital Group launched CAF in mid-2022 seeded with a $177 million state-of–the-art glasshouse in Warragul, Victoria. The fund was structured as being complementary to Centria’s existing agricultural trusts, and is taking a hybrid investment approach, meshing its focus between primary agricultural production farmland and ancillary assets along the supply chain with farming technologies. 

“The Fund has a two-prong investment strategy,” explained Jason Huljich, joint CEO, Centuria Capital in June 2022. “It will primarily focus on precision farming assets, such as glasshouse production, netted crops, vertical farming and properties with access to water, substrate growing and automated harvesting.”

“Secondly, we will target assets aligned to the agricultural supply chain, such as processing, storage/cold storage and distribution to meet the paddock-to-plate demand. This remit includes both existing assets as well as those where farming operations can be expanded or improved through capex funding.”

In order to lessen its operational risk exposure, CAF primarily invests as a lessor. And it’s from this position that the fund is approaching the P’Petual Holdings assets, which will continue to be managed by P’Petual. 

“The Adelaide Plains acquisition is aligned with CAF’s investment strategy to acquire high-quality agricultural assets, leased to reputable operators with strong ESG credentials and in higher revenue producing sectors such as protected cropping,” said Huljich. 

Located about 38 kilometers north of Adelaide in an highly productive agricultural area known as the food bowl of South Australia, and seven kilometers inland from the St. Vincent Gulf, the asset’s sustainability is enhanced by robust water management that recycles rain and surplus water, the recycling of carbon emissions, and integrated pest management through the introduction of “good insects” into the greenhouse facilities to combat unwanted pests. 

The entire operation will continue to be run by P’Petual Holdings, one of South Australia’s top producers of tomatoes, mini-cucumbers, eggplants, and jalapeno and mini capsicum varieties, under the terms of a 10-year, triple-net lease with annual rent escalations. 

“Centuria is excited about this recent acquisition, which provides an exceptional opportunity for P’Petual to scale-up and implement operational efficiencies,” said Andrew Tout, head of agriculture, Centuria. “It is another great example of Centuria partnering and collaborating with seasoned agricultural innovators.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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