Global private equity group TPG has sold real estate operated by Inghams Enterprises, one of Australia’s largest poultry producers, to real estate investment trust (REIT) Charter Hall Group.
The sale amounts to A$171 million ($146 million; €117 million) across assets located in Brisbane, Adelaide and Melbourne. The properties will be leased back to Inghams on a 22-year lease agreement and an initial rent of 7.82 percent of income, according to a press release.
TPG has gradually been selling off Inghams’ property since 2012 when it took the entire Inghams’ real estate portfolio – some 53 properties – to market. Earlier this month TPG sold 31 properties to WP Carey, a New York-listed REIT, and six properties to Australian family office RF Capital and CorVal, an Australian property investment firm. Inghams leased back the farms in both transactions.
TPG has not yet fully exited the properties and would not comment on the latest deal.
The deals underpin the increasing demand for Australian agriculture assets in a sale and leaseback structure, according to Danny Thomas, regional director of agribusiness at CBRE, who has been advising on the Inghams sales.
“We are actively working with a number of parties on similar sale and leaseback transactions across pork and poultry facilities, vineyards and wineries, horticulture and large pastoral properties in northern Australia,” Thomas told Agri Investor. “Intensive food production facilities (glasshouses, broiler and breeder poultry facilities) and other infrastructure facilities such as grain receivers are in high demand,” he said.
Thomas is also working on the sale of Lactanz Dairies, Western Australia’s largest standalone dairy enterprise, which went up for sale in September.
Charter Hall, a REIT listed on the Australian stock exchange ASX, purchased the six industrial assets through three of its funds, Core Logistics Partnership, Direct Industrial Fund II and Core Plus Industrial Fund.
The Core Logistics Partnership fund is Charter Hall’s most recent investment vehicle, which launched last year and closed on A$153 million. The REIT holds a 15 percent stake in the fund along with two institutional co-investors.
The acquisition is consistent with Charter Hall’s strategy of reweighting its portfolio toward assets with long leases to strong credit quality tenants with leading market positions, according to David Harrison, the trust’s joint managing director.
“The six properties are all well located in strategic industrial locations, with high underlying land values underpinning the long term triple net cashflow,” he said in a statement. “Inghams is the largest integrated poultry producer in Australasia, with blue chip customers such as Woolworths, Aldi, KFC and McDonalds, and we are pleased to be welcoming this new tenant customer into our portfolio.”