Centuria Eyes Fresh Produce, Buys Regional Glasshouse

Centuria has acquired a huge glasshouse in regional Victoria and leased it straight back to the fruit and vegetable producer who owned it.

Centuria paid $177 million for the climate-controlled protected cropping facility covering 33.5ha in Warragul, about 100km south-east of Melbourne.

For its part, Flavorite Group—the biggest producer of glasshouse fresh fruit and vegetables in Australia—has taken on a 19-year, triple-net-lease from Centuria.

The single-tenant, triple-net lease, increasingly popular in the industrial and agricultural sector, leaves the responsibility of all maintenance with Flavorite for the life of the lease.

The acquisition is the seed asset of a new unlisted, open-ended fund from the investment manager, Centuria Agriculture Fund.

Centuria’s joint chief executive Jason Huljich said all the forecasts around demand for Australian-grown fresh food are very robust around growth, particularly in the export markets.

The Warragul glasshouse is part of a 78-hectare production facility for Flavorite, which produces about three million kilos of tomatoes a year and supplies hydroponically grown fruit and vegetables to major supermarkets including Coles, Woolworths and Aldi.

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The family-owned business was acquired by Roc Partners about two years ago.

Huljich said Centuria was looking to acquire other assets in the sector. They would partner with select operators who have a strong track-record in producing high-yielding produce, and who are well-established with extensive experience.

“At this stage we are not taking operational risks, we are just buying assets that have a long-term lease, with very strong, experienced tenants,” he said.

“There is nothing we have transacted yet, but we are talking to a number of vendors.

“That is a mix of fruit, nuts, vineyards, agro-logistics, and obviously we like glass houses, so we will continue to look at those.”

Centuria began looking at the agriculture sector after it merged with Perth-based Primewest in a $600-million deal in July last year. That brought with it seven agriculture properties worth about $343 million.

Centuria head of industrial Jesse Curtis will join The Urban Developer as part of our Industrial and Logistics vSummit on Thursday.