Originally posted March 29, 2017
agCap has appointed CBRE as agent to sell the Sustainable Agriculture Fund (SAF) on behalf of its Australian institutional investors. CBRE will run a marketing program seeking expressions of interest for all or parts of the assets and/or all or part of the units in the Fund.
SAF is a portfolio of 17 farms organised into 5 aggregations, that operate broadacre cropping, irrigated, beef and dairy enterprises. With over 23,000 hectares of land, located in diverse geographic regions across eastern Australia, SAF provides interested parties access to farming operations of significant scale and also diversity. ABARES have recently released its annual survey of returns for all broadacre and dairy farms in FY2016. This data confirms that SAF has delivered top quartile performance in the three years ending FY2016, with FY2017 anticipated to also deliver top quartile performance.
The Fund has a completed a fixed 7.5-year term and during that time, agCap deployed $145m, acquired over 27,000 hectares of land and invested to increase the productivity of each aggregation. In addition to delivering top quartile sustainable performance, a high performing management team has been built to run the farms in accordance with a well-developed operating strategy and associated systems.
The decision to put the assets on the market was a unanimous decision by all investors and will provide an opportunity for all investors to realise the value achieved by the strong investments made on each of the farms to increase productivity, while providing purchasers an opportunity to benefit from the next phase of growth.
Chief Executive of agCap, Martin Newnham explains: “Our foundation investors should be recognised for being pioneers in this sector and for their commitment since 2009. The SAF portfolio was very well constructed and in recent years delivered our investors steady income returns, capital appreciation and annual distributions. These are very good assets that still have development potential. The interest we are receiving indicates the sales process will be highly competitive.”
The offer is being pitched widely and expressions of interests are sought from parties for any or all of the assets and any or all of the units in the Fund. Deo de Jesus, General Manager, Strategy explains: “We understand that there will be some parties that will be interested in individual assets, while there will be others that are interested in the fund as a going concern. By keeping the marketing process as wide open as possible we are seeking to extract full value for the foundation investors”.