Foundation Assets for Warakirri Diversified Agriculture Fund

06 October 2020

Warakirri Asset Management has announced transactions on three foundation assets with initial Tenant Partners for the Warakirri Diversified Agriculture Fund (Fund).

The Warakirri Diversified Agriculture Fund was launched in 2019 with capital commitments from foundation wholesale investors, including family offices, charities, advisory groups and superannuation funds.

The Fund’s strategy is to own a diversified portfolio of investment grade Australian agricultural assets for the primary purpose of leasing to high quality agricultural businesses (Tenant Partners) who are experts in their field.

Warakirri has secured deals on three foundation assets for the Fund and long-term Tenant Partnerships with three fresh produce sector leaders – Costa Group, Moora Citrus and Dicky Bill Australia – across three separate acquisitions as part of a well progressed pipeline of transactions.

The three initial Tenant Partners will lease and operate the selection of high-quality investment grade assets across states of Victoria, Queensland and Western Australia. The properties will provide investors with direct exposure to farmland, infrastructure and water entitlements, producing high quality Berry, Citrus and Soft Leaf Vegetable products for domestic and international markets.

Together, the foundation investments provide a secure long-term income return of 8-9%1 per annum to the Fund, quarterly income cash distributions and strong long-term capital growth potential, with an average tenant weighted average lease expiry (WALE) of 12 years.

Steve Jarrott, Portfolio Manager for the Fund, said: “We’re delighted to commence the Fund with these high-quality foundation investments and in particular, the class and calibre of our initial Tenant Partners. From Costa Group, who are a benchmark in sustainable, commercial fresh produce farming, to WA’s premier, vertically integrated citrus business in the Moora Citrus Group, and Dicky Bill Australia, a business with an intense focus on quality, consistency and sustainability in vegetable production.”

These are all quality businesses which reflect the attributes and values Warakirri look for in a Tenant Partner.

As a core Agriculture Property investment strategy, the Fund targets a wide range of Australian agricultural assets in different regions and sectors, including fruit, nuts, grapes, infrastructure, intensive livestock and water. Between now and calendar year end, Warakirri plans to execute and announce the acquisition and long-term lease back of the Fund’s first agribusiness supply chain infrastructure investment.

Agriculture is supported by a strong, long-term secular demand outlook for Australian agricultural products, offering investors with the potential for competitive investment performance over the long term, with low volatility and low to zero correlation to traditional asset classes.

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