Warakirri Launches Institutional Farmland Fund
18 April 2021
We’re pleased to announce the launch of an open-ended farmland fund taking advantage of the opportunities presented by the growing global demand for food and Australia’s important part in the global food supply chain.
The Warakirri Farmland Fund has been developed specifically for domestic and offshore institutional investors, having already secured significant seed funding from one of Europe’s largest pension funds.
The Fund will buy, develop and own a diversified portfolio of investment grade agricultural property and lease the assets to high quality agricultural businesses, as Tenant Partners. Target assets include horticulture (nuts and fruit), viticulture (wine and table grapes), water entitlements and selected row crop farmland assets.
The Fund is expected to deliver a strong return profile with over half the forecast returns to be delivered through regular income payments, and the balance via long-term capital growth of the underlying assets. The Fund will utilise Warakirri’s Sustainable Best Practice framework, including strategies to reduce energy use and carbon emissions and improve water efficiency and biodiversity.
The strategy leverages Warakirri’s 24 years’ experience in agriculture and supports our objective of providing investors with access to strategies with low correlation to listed markets. It provides an attractive option for institutional investors who are seeking greater access to alternative assets, with low volatility and the strong returns being generated from a diversified exposure to the resilient farmland sector.
Warakirri has already originated several farmland acquisition deals for the Fund, working in collaboration with several high-quality Tenant Partners on transactions with long WALE* leases and rental yields of seven percent^ and above.
The launch of this fund follows the success Warakirri has had with a similar strategy developed for wholesale investors, including family offices, charities, and advisory groups. That fund has recently completed deployment of its initial capital raising, establishing a foundation portfolio that will provide secure long-term income return of 8-9%^ per annum, with strong long-term capital growth potential.
Agriculture is supported by a strong, long-term secular demand outlook for Australian agricultural products, and participating investors are being rewarded with top tier investment performance over the long term, with low volatility and low to zero correlation to traditional asset classes.
* WALE = weighted average lease expiry
^ Property returns quoted to the Fund after leverage, before fees and tax.
