A new agricultural investment fund has been launched, seeking $16 million for the purchase of a 30ha commercial horticultural business west of Auckland producing herbs for consumers.
Centuria NZ Agricultural Property Fund is the first New Zealand venture by the listed Centuria Capital Group in Australia with over $20 billion of assets under management, including agricultural property.
The minimum application for investment is $25,000 and the forecast after-tax distributions start at 6.5% in year one.
Centuria NZ will not be borrowing to fund the acquisition, ensuring investors are not exposed to the volatile interest rates environment, chief executive officer Mark Francis said.
The property purchased at Helensville is already tenanted by Superb Herb, the nation’s largest supplier of potted and cut herbs with over 50% of market share.
Under glass, it produces over 100,000 retail units a week and supplies all major supermarkets.
Superb Herb has a 15-year lease with a further 10-year right of renewal.
The Centuria fund is investing in the property, not the herb business, and the lease has a built-in annual rental growth of 3.5%, with a market rent review at year 9.
The tenant is responsible for all repairs, maintenance and capital expenditure and according to Bayleys Investment Products division, which is marketing the fund, this is the most landlord-friendly form of property lease.
Francis said future acquisitions may include greenhouses, vineyards, forestry, farmland and agriculture logistics facilities.
In the fund marketing, independent economist Cameron Bagrie said that ways of investing in NZ agriculture for non-farmers are limited and that horticultural industries are forecast to be among the strongest-performing parts of the economy.
Centuria Agriculture Fund is Australia’s biggest glasshouse landlord, with 74ha and A$500m ($535m) under management.