Australian real estate firm seeks to carve out agri niche with A$400m flour deal

The asset will anchor Qualitas’ new food infrastructure fund, which is seeking more than A$200m in pledges from domestic and international institutions.

Real estate specialist Qualitas has bought a portfolio of 10 flour-milling and bakery operations in Australia from Allied Pinnacle.

The Melbourne-based firm said the properties, together valued at A$400 million ($302 million; €252 million), were placed in the Qualitas Food Infrastructure Fund, a wholesale vehicle backed by European and Asian pension and insurance companies and domestic institutions.

Registered since December as a fixed-unit trust, the fund is seeking to gather more than A$200 million in investor commitments, a spokeswoman for Qualitas told Agri Investor.

Mark Fischer, managing director and principal for investments at the firm, qualified the offering as “unique” thanks to its combination of “elements consistent across real estate, infrastructure and agricultural investments.”

“Our thesis is that there is a developing universe of ‘cross-over’ investors from each of those sectors who are increasingly focused on what we call ‘soft infrastructure’,” he explained.

Clinton Jellis and Andrew Grant of Charter Keck Cramer, which acted as legal advisor to Allied Pinnacle on the transaction, said the A$400 million price tag represented a sub-6 percent yield on the commencing rent.

The sale, they noted, “is another example of an emerging buyer profile where a local investment manager with varied and often international passive capital combine as the purchasing entity.”

The properties span Victoria, New South Wales, Queensland, Western Australia and South Australia, comprising a total of nearly 130 Hectares of freehold land in inner city, suburban and regional locations. These were sold subject to eight 30-year lease holdings and two 15-year leases held by Allied Pinnacle.

That group, which is Australia’s largest supplier of flour for human consumption, was formed last year through the merger of Allied Mills and Pinnacle Bakeries, both portfolio companies of buyout house Pacific Equity Partner.