Core Property has reviewed the Primewest Agricultural Trust No.2, the latest unlisted property offering from Primewest, which is part of Centuria Capital Limited (ASX: CNI).
The Trust provides investors with an opportunity to invest in Australian agricultural assets with the Manager targeting a $100M portfolio. The initial asset, the “Moora” Almond Farm in Hillston NSW, is a 524-hectare almond farm in the Riverina region of NSW. The Property is leased to Lachlan River Almonds Pty Ltd, an investment entity managed by ROC Partners. ROC is an experienced alternative investment manager with $8.2B of assets under management, including $1.7B in agricultural assets. The lease is a 12-year, triple net lease, with 2x5-year options, which aligns with the ~25-year production life for almond trees and allows the soil to be replanted or repurposed thereafter.
The almond trees were planted in 2017/2018 and have delivered an initial harvest in 2020 and 2021 and are expected to reach peak production around 2023-2024. The Property is also located in a well-irrigated area, having access to groundwater as well as river water.
The Manager is targeting the Trust to deliver investors with a net (of fees) distribution yield of 7.0% p.a. in FY22.
The Trust is seeking to raise $34.2M of equity through the issue of 34.2M units at an Issue Price of $1.00 per unit. The Offer is open to Wholesale investors only.
Core Property has rated the Fund as RECOMMENDED.