Warakirri Ag fund seeds its new portfolio with Gingin farmland leased by Moora Citrus and Costa Group names

An asset manager which has snapped up more than $11 million of premium farmland near Gingin is eyeing further WA rural properties to include in its new Diversified Agriculture Fund. Warakirri Asset Management recently announced its had bought a premium Gingin farm which counts Moora Citrus and ASX listed Costa Group’s berry division as its tenants. The two operations will form part of the foundation assets of the new fund, along with Dicky Bill vegetable farms in Victoria and Queensland. Moora Citrus and Costa will continue as tenants at the Neergabby property, sold by the Taddei family, under long-term lease arrangements with Warakirri as their new landlord. It is understood Costa leases about 30 per cent of the 200ha property to Costas for berry production and the balance is leased to Moora Citrus, which operates a 100ha of established citrus and stone orchard. Although Warakirri would not comment on price, other sources say it fetched more than $11 million. Portfolio manager Steve Jarrott said Warakirri had secured deals on the the assets and long-term tenant partnerships, as part of its well progressed pipeline of transactions. He said Warakirri also planned to execute and announce the acquisition and long-term lease back of the fund’s first agribusiness supply chain infrastructure investment, in the eastern states, by the end of 2020. Once complete, the four transactions will total about $50 million, with the fund expecting eventual commitments of $300 million. Mr Jarrott said the fund would focus on investing in value sectors with attractive lease terms and quality tenants. Examples of likely assets in higher value sectors are nuts, fruit, vineyards, intensive livestock, agriculture infrastructure and water. He said the Diversified Agriculture Fund had capital commitments from wholesale investors, including family offices, charities, advisory groups and superannuation funds. The investors are mostly Australian based, including some from WA, Mr Jarrott said. The foundation investments will provide an income return of 8-9 per cent per annum to the fund, and average tenant weighted average lease expiry was 12 years. Mr Jarrott said the fund had had other premium WA properties in its sights, but the investment process had been slowed by the State’s hard border and challenges in completing due diligence. Moora Citrus executive director Sue Middleton said besides the change in landlord, the structure of the Moora Citrus business remained the same - privately owned by herself and husband Michael Brennan, Mark English and wife Wiggy Saunders and equity partners the Gillon Group from Melbourne. She said group of Moora Citrus owners, which had been leasing part of the Neergabby property since last year, was happy to be working with Warakirri, as a high quality long-term investor in agriculture.