August 30, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Centuria Capital Group subsidiary Primewest Agricultural Trust No. 1 (PWAT1) acquired a portfolio of six vineyards across eight properties, spanning 113.74 hectares from Accolade Wines through an off-market transaction. 

Together with 223 megaliters of water assets on a 10-year, triple-net sale-and leaseback term, the non-contiguous estates were secured for a consideration of $8.2 million. Collectively, 74.95 hectares are planted in vines that are supported by irrigation sources held across nine separate entitlements.

Broken down, the deal included:

Resurrection Vineyard – Located in the Barossa Valley, this vineyard includes 17.55 hectares planted in Grenache, Mataro, and Shiraz.

Evans Vineyard – Located In Coonawarra, Evans is planted in 15.31 hectares of Cabernet Sauvignon, Merlot, and Shiraz.

Hanlin Hill – Located in Clare Valley, Hanlin is planted in 21.66 hectares of Malbec, Riesling, and Shiraz.

Stobie – Also located in Clare Valley, Stobie is planted in 5.63 hectares of Riesling and Shiraz.

Clarendon – Located in McLaren Vale, Clarendon is planted in 9.13 hectares of Cabernet Sauvignon, Merlot, Sangiovese, and Shiraz.

And Petaluma Gores Road – Located in Adelaide Hills, Petaluma is planted in 5.67 hectares of Chardonnay, Pinot Gris, and Pinot Noir.

“This was a rare opportunity to secure a viticultural portfolio across five well regarded South Australian wine regions, famed for producing internationally renowned wine varieties,” said Andrew Tout, head of agriculture, Centuria. “Each estate is meticulously managed, with all vines hand pruned; an element that facilitates the production of ultra-premium wines such as St. Hallett Blackwell Shiraz and the Petaluma Hanlin Hill Riesling, which recently received a James Halliday wine rating of 98/100.”

Centuria and Primewest

Speaking of off-market deals, it was back in April 2021 that Centuria Capital entered into a bid implementation deed (BID) with fund manager Primewest for an off-market takeover offer of Primewest for A$600 million (US$462.5 million). 

Primewest entered the Australian agricultural space in April 2020 with the launch of its inaugural ag investment fund with an initial funding target of A$100 million (US$76 million) and its first acquisition.

Within 10 months, in February of this year, Primewest more than tripled its funding target for its newly launched Primewest Agricultural Trust No 1 to A$350 million (US$268 million), and stated it may list the fund, but did not specify a timeframe for such action. 

Already with a presence in commercial, industrial, retail, residential, and tourism, Primewest 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 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.

Only two months later in June 2020, Primewest agreed to acquire GoFARM Asset Management Pty Ltd – the manager of Vitalharvest Freehold Trust in a A$10 million (US$11.27 million) deal. 

Now, the latest addition of these  six vineyards, the PWAT1 portfolio stands at 11 assets with a value of $115.2 million.

Accolade 

Accolade Wines is a global, premium wine and spirits company, and the second largest wine company in Australia. With operations spanning 130 countries, Accolade controls such well-known brands as Hardy’s, Echo Falls, Grant Burge, St. Hallett, and House of Arras, and over recent months has been making moves indicative of a reorganization.

On August 1, 2022 Global AgInvesting News shared that Accolade Wines sold its 55-hectares Beemak Vineyard located in the Yarra Valley to Melbourne-based wine giant Treasury Wine Estates in a deal valued at just over A$7 million (US$4.88 million). 

Located in the Upper Yarra Valley near TWE’s Hubert Estate, Beenak was planted in 1988 with 45 hectares of Pinot Noir and Chardonnay grapes for the production of both still and sparkling wines, averaging 364 tons annually. The deal also included water entitlements totaling 71 million liters, and several outbuildings on the property.

At the time, Accolade stated that the decision to divest Beenak was due to an oversupply of grapes from that region of the country.

Indeed, this six-vineyard sale is the second recent transaction between Primewest and Accolade. In mid-2021, winemaker Rolf Binder sold his well-known brand to Accolade, and his vineyard to PWAT1, which Accolade currently leases from the Trust.

“Accolade Wines has a proud heritage that has grown from humble beginnings in South Australia to a global market, with our labels found on dinner tables and restaurants around the world,” said Matthew Adams, general manager, strategy and transformation, Accolade Wines. “Primewest understands the intricacies of the agricultural property market, and it’s a pleasure to be working with them again.”

“The sale-and-leaseback arrangement for these well-cultivated vineyards provides Accolade Wines with capital to reinvest in our premium wine production,” continued Adams. “Importantly, it also locks in grape supply for flagship brands in our premium range, ensuring we can continue making the great wines that our customers love.”

~ Lynda Kiernan-Stone is editor 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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