June 25, 2020

By Lynda Kiernan, Global AgInvesting Media

Property fund manager Primewest has agreed to acquire GoFARM Asset Management Pty Ltd – the manager of Vitalharvest Freehold Trust – in a A$10 million (US$11.27 million) deal. 

Founded in 1991, Primewest is a leading Australian real estate funds management business managing assets across multiple asset classes (agriculture, commercial, convenience, industrial, and others) valued at more than $4.1 billion. The group has 31 specialists with diverse skill sets across leasing, transaction realization, and development, and stated that it has $43 million in available cash, giving it a good position from which to pursue future growth post-COVID-19. 

Through this deal, Primewest also has acquired an 11.8 percent stake in Vitalharvest Freehold Trust (VFT), and a further first right of refusal over another 6.2 percent, subject to certain conditions.

VFT is an externally managed real estate investment trust (REIT) that currently holds a portfolio of properties valued at $275 million with a market capitalization of approximately $143 million. It is the owner of the largest berry and citrus farm aggregation in Australia, which is 100 percent leased to Costa Group, one of the country’s largest horticultural companies.

This portfolio has a weighted average lease expiry of 6.5 years, however the tenant holds an option for a 10-year extension, which if exercised, will provide significant rent growth through an uncapped market rent review at the end of the initial term in 2026, according to a release announcing the deal. 

“The real agricultural property and agri-logistics sector is an exciting sector with strong fundamentals,” said David Schwartz, managing director, Primewest.

“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.”

As a means of expanding Primewest’s exposure to real agricultural property assets connected to the growing global demand for nutritious, healthy food, the fund will explore investment opportunities in targets that not only focus on production, but also processing, storage, food packing and delivery, or other ancillary products touching the agricultural supply chain throughout Australia and New Zealand.

And with this new focus comes a new name for VHT, which will now be called the Primewest Agri-chain Fund – giving it greater brand awareness by leveraging Primewest’s reputation across Australia as a leading property funds management platform.

“This transaction is an exciting step forward for Primewest and consistent with the strategy to expand our distribution capability into listed A-REITs,” said John Bond, executive chairman, Primewest. “Importantly, Primewest will co-invest along with other VTH investors as its largest investor. We look forward to working with VTH’s existing investors in its next stage of growth.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.