Page 8 - The Land Spring Property Guide

8 SPECIAL PUBLICATION Thursday September 30, 2021 www.acmadcentre.com.au
SPRING PROPERTY GUIDE 2021

Lease-backs unlock capital

BY MARIAN MACDONALD Moora Almond Orchard, the day, that was it, you had thing that has been the deci-
they include: no control over it. sion of the vendor."
PRIMEWEST is not the ■ Rolf Binder Winery & "I think the big opportu- About half of the deals
routine corporate farmer. Vineyards, Barossa Valley, nity for us and for Australian orchestrated by the trust
Nor does it actually do its SA agriculture is to really hone are sale-leaseback arrange-
own farming. ■ Piscioneri Vineyards & in on our ability to produce ments and the other half are
Instead, Primewest buys Citrus Plantation, Mildura, really high-quality produce, straightforward sales.
properties and leases them VIC and just go that one step fur- When, for example, the
to farmers like orchardists, ■ Rullo Orchards, ther up the supply chain." Montague family wanted to
the Montague family, or Shepparton, VIC While all the farms ac- diversify its apple and stone
horticulturalists, Lamattina ■ Lamattina, Mornington quired to date hosted plant- fruit business into citrus, it
& Sons. Peninsula, VIC based agriculture, Mr Tout approached a Mildura farm-
It yields 6-7.5 per cent ■ Pinegatta, Deniliquin, NSW said Primewest wasn't ac- erintandemwithPrimewest.
rental returns plus capital Averaging $23.5m an as- tively avoiding livestock. The investment firm
growth. A portfolio of prop- set, the focus is not on the "We're looking at a lot of bought the property for
erties then sit in a trust gen- largest-scale properties. livestock deals but, typically, Montague to lease, which
erating returns for Primew- At the top of Mr Tout's broadacre sheep and cattle has in turn kept the original
est's wholesale investors. shopping list are attractive farms are giving a lower management team.
Its first trust is already fully geographic locations, good return to investors so ... we While Primewest looks for
subscribed with $100 million soils and access to water that have looked at some inten- farms with an established
in funds and the second was provide drought resilience. sive livestock opportunities track record of skilled man-
launched in July with the Importanttoo,hesaid,was out there," he said. agement, its interaction
$53.9m purchase of Moora the skill of the operators and While tales of preda- style with the farmers is very
Almond Orchard at Hillston industry growth potential. tory corporate behaviour much hands-off.
in the NSW Riverina. "The big opportunity I'm abound, Primewest invest- There is annual reporting
Of that $53.9m, Primew- seeing is to partner with ment was a boon for farmers, but the rental fee is a straight,
est plans to raise $34m UNCORKED: Primewest agricultural transactions people who want to expand, he said. flat rental, with no special
from investors. manager Andrew Tout says investors can unlock capital people who are good at what "It can help with succes- incentives.
The Moora transaction for farm growth and succession planning. they do, but also people sion, it can allow them to "The farmer does what the
provides a 12-year, triple-net who have unique produce expand by monetising their farmer does," Mr Tout said.
lease, which means the leases average 10-year terms transactions manager An- and a little bit more control balance sheet for expansion, "It's a tenant landlord re-
tenant is responsible for and investment trusts run for drew Tout said. over their supply chain," Mr there's a raft of reasons that lationship so we don't have
ongoing expenses like insur- an initial eight years that can He's responsible for sourc- Tout said. someone might choose to any involvement with the
ance, and maintenance, in be extended. ing and overseeing the two "For the typical wheat enter into a sale and lease- farm day to day."
addition to paying rent and It's a buffer designed unlisted funds and their six farm back in the 1980s, you back with us," Mr Tout said. Primewest was acquired
running costs. to give investors certain- properties. took your wheat to the silo "Generally, it's not some- in April by the ASX-listed
Primewest's agricultural ty, Primewest agricultural In addition to the for whatever the price was on thing we seek out, it's some- Centuria Capital Group.

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