Steve Jarrott
Warakirri Asset Management has announced settlement on an additional asset for the Warakirri Diversified Agriculture Fund (Fund), which has now deployed in excess of $50 million after securing capital commitments from wholesale investors across family offices, charities, advisory groups and superannuation funds.
The Fund’s fourth asset is a strategic agriculture infrastructure investment in Victoria, consisting of a modern livestock feed mill and related commodity storage located on the edge of Cobden in the Western Districts.
The vendor in the transaction, stockfeed market leader Reid Stockfeeds (RSF), remains in occupation of the property as another best-in-class Tenant Partner of the Fund, entering a lease back agreement that will see this business continue to operate the asset for at least a further 20 years.
From five production facilities in Victoria, RSF are in the top 5 national producers of stockfeed and a key player in the Victoria, Riverina and South East South Australia markets they operate in.
Late last year, Warakirri secured deals on three foundation assets for the Fund and long-term Tenant Partnerships with fresh produce sector leaders – Costa Group, Moora Citrus and Dicky Bill Australia.
Together, these initial investments provide a weighted average rental yield of 8.2%1 per annum to the Fund and a 15-year weighted average lease expiry.
The Fund recently made its inaugural quarterly income distribution for the March 2021 quarter end, equating to an annualised yield of 7.4% per annum on called capital (net of fees and fund costs). This first payment is in line with the Fund’s policy of distributing all surplus income and slightly above its 6%+ yield target.
Steve Jarrott, Portfolio Manager for the Fund, said: “We’re delighted to add another quality asset and Tenant Partner to the Fund. Reid Stockfeeds has a strong track record and are one of Australia’s leading providers of high quality stock feed. They are a well-respected, growing business, servicing livestock producers in the dairy, pork, poultry, beef and lamb sectors”.
“We are committed to continuing our disciplined approach, to carefully select new assets and Tenant Partners, and ensuring this is not only a rewarding income investment, particularly in the current low interest rate environment, but a valuable, low volatility, total return exposure for our clients over the long term” added Mr. Jarrott.The Warakirri Diversified Agriculture 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 been acquiring, developing and operating Australian agricultural assets on behalf of investors for over 20 years.