The firm has acquired two established vineyards in Western Australia for A$22 million on a sale-and-leaseback basis. The agreed lease is for 15 years with Margaret River Wine Production, which is part of the Fogarty Wine Group.
The assets – Amadeus Vineyard and Smithbrook Estate – are located in the Margaret River and Pemberton regions, respectively. The vineyards are used to produce premium grapes for several wine brands owned by the Fogarty Wine Group.
The acquisitions represent the seventh and eighth assets in the Diversified Agriculture Fund, which crossed A$100 million in AUM earlier this year with the purchase of an almond orchard in northwest Victoria in a A$32 million off-market deal.
The fund’s other assets include the Chromy Estate vineyard and winery in Tasmania, a livestock feed mill and commodity storage facility in Victoria, a soft-leaf vegetable operation in Victoria and Queensland that is leased to Dicky Bill Australia, a citrus asset in WA leased to Moora Citrus Group, and a berry asset in Western Australia leased to ASX-listed giant Costa Group. The latter three assets were all purchased in 2020 as foundation assets for the fund.
The Diversified Agriculture Fund aims to generate a total portfolio level net IRR of 7-11 percent per year. In its most recent update covering the period to September 30, 2023, the fund generated a return of 5.63 percent for the previous 12 months and has returned 6.57 percent since inception in May 2020.
Steve Jarrott, portfolio manager for the fund, said in a statement on the latest deal: “Through this investment we’re adding another two great premium wine assets and a fantastic new tenant partner for the fund. Fogarty Wine Group is not only one of Australia’s most awarded wine producers, but a best-in-class, market-leading operator producing a strong range of ultra-premium wines across a number of great brands and regions.”
Warakirri last month launched a new flagship broadacre cropping fund targeted at institutional investors, the Sustainable Broadacre Cropping Strategy, which is an open-end vehicle seeking to raise $500 million-$750 million over several years.
This builds on two funds more targeted towards wholesale investors that the asset manager launched in recent years: the Diversified Agriculture Fund in 2020, as well as the Warakirri Farmland Fund, which launched subsequently in 2021.