March 8, 2023

Photo credit: Centuria Capital

By Lynda Kiernan-Stone, Global AgInvesting Media

Specialist investment manager Centuria Capital Group has acquired a 20-hectare (50-acre) tomato glasshouse operation in Guyra, New South Wales via its Centuria Agriculture Fund (CAF) from an undisclosed family-owned investment office.

This is the third off-market glasshouse asset acquisition for CAF, bringing total under-glass acreage to approximately 74 hectares (183 acres); total AUM to A$323 million (US$213 million); and positioning CAF as the biggest large-scale glasshouse owner in Australia. 

“In just over six months, CAF has secured three high value, off-market glasshouse assets worth more than A$323 million,” said Andrew Tout, head of agriculture, Centuria. “In recent years, the pandemic and other climatic and geopolitical events have highlighted the importance of food security and access to non-discretionary fresh produce.”

Centuria launched CAF in June 2022 as an open-ended, unlisted investment fund seeded with a A$177 million (US$117 million) state-of–the-art glasshouse in Warragul, Victoria.

As is often the case, funds will either focus on primary agricultural production – farmland and ancillary assets along the supply chain, or, on the flip side, focus more on farming technologies. CAF seems to be taking a more hybrid investment approach. 

Jason Huljich, joint CEO of Centuria Capital, explained in June 2022, “The Fund has a two-prong investment strategy. 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 December 2022, CAF announced its second acquisition – Sundrop Farms – one of the largest glasshouse operations in South Australia.

Located in Port Augusta with unlimited access to seawater, the Sundrop Farms assets encompass a 246-hectare (608-acre) site including four five-hectare glasshouses; a 1.4 megaliter reverse osmosis plant; a 1 megaliter desalination plant that processes up to 600 megaliters of seawater annually; a 25 megaliter storage dam; a packaging warehouse; and a 12.5 hectare Concentrated Solar Energy System (CSP), which generates 30,000 megawatts for heating, and 45,700 megawatts for electricity and facilities seawater desalination. 

This location is ideally suited for tomato production as it is relatively low-humidity and receives up to 30 percent more winter sunlight compared to other greenhouses in the country – giving the business a natural competitive advantage and ability for year-round production.

Continuing its rapid growth, CAF has now acquired its third asset in Guyra at the top of New South Wales’ Northern Tablelands in the New England region, bringing Centuria’s total agricultural AUM to A$500 million (US$330 million), and CAF’s AUM to more than A$320 million (US$211 million). 

“Centuria has expressed its intention to strategically grow its platform across alternative real estate sectors, including agriculture,” said Jason Huljich, joint CEO, Centuria. “We believe strong demand fundamentals will drive continued investor interest in agricultural real estate and Centuria will continue to seek high quality assets, leased to reputable operators with strong sustainability credentials in high revenue producing sectors such as protected cropping.”

“We have developed a healthy acquisition pipeline of assets,” continued Huljich, ”which suit the CAF investment profile and expect total agriculture AUM to exceed A$600 million (US$395 million) during FY23 and continue to grow rapidly in FY24.”

In connection with the deal, Centuria has established a 15-year term, triple-net lease with CPI-linked rent reviews with the existing tenant Tomato Exchange. 

As a subsidiary of Costa Group, the largest grower, packer, and marketer of vegetables and fresh fruit in Australia, Tomato Exchange produces 12,800 tons of tomatoes at the Guyra site thanks to its unique microclimate with high levels of sunlight in winter and cool summers. 

Each year, the output from this site can then easily reach the market via Costa’s long-standing relationships with major fresh produce retailers across the country including Woolworths, Coles, Aldi, Costco, and Harris Farms. 

Tout concluded, “Australia is also reputed for being a ‘clean and green’ producer of high-quality agricultural products and demand for Australian grown fresh food and other quality agricultural products is forecast to increase materially over the next 10 years, driven by middle class population and income growth in both local and offshore markets.”

~ 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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