Centuria snaps up Guyra glasshouse in $80m play

Property funds house Centuria Capital has bought one of the nation’s largest tomato glasshouses as rural assets hold up in the face of rising interest rates.

Centuria Capital has bought a tomato glasshouse facility in Guyra, NSW, from Costa Asset Management

Property funds house Centuria Capital has forked out about $80m to buy a glasshouse in regional NSW as rural assets hold up in the face of rising interest rates.

Investors are chasing rural property even as other areas of commercial property come under pressure with office and industrial values being reset.

“In recent years, the pandemic and other climatic and geopolitical events have highlighted the importance of food security and access to non-discretionary fresh produce,” Centuria head of agriculture Andrew Tout said.

“Australia is also reputed for being a clean and green producer of high-quality agricultural products and demand for Australian grown fresh food and other quality agricultural products is forecast to increase materially over the next 10 years, driven by middle class population and income growth in both local and offshore markets,” he added.

Centuria bought the 20-hectare tomato glasshouse facility in Guyra, NSW, from Costa Asset Management and will put it into its unlisted pure-play, Centuria Agriculture Fund.

Costa Asset Management is the investment office for the families of Robert and Anthony Costa, which they set up in 2011 on the partial sale of Costa Group. At the time, its portfolio was mainly agricultural land and businesses.

The Guyra property is north of Armidale at the top of NSW’s Northern Tablelands in the New England region. The area provides a unique microclimate with high sunlight levels in winter and cool summers.

The tenant, Tomato Exchange, has entered a new, extended lease on a 15-year term, triple-net lease with inflation-linked rent reviews. In addition to the 20-hectare glasshouse, the asset includes a one-acre nursery, 65 megalitre dam, packing and distribution sheds and cool rooms.

Tomato Exchange produces 12,800 tonnes of tomatoes from the asset each year and is a unit of the listed Costa Group, Australia’s largest grower, packer and marketer of vegetable and fresh fruit. The company supplies Coles, Woolworths, Aldi, Costco and Harris Farms.

The deal marked the fund‘s third off-market glasshouse acquisition taking the total size of its glasshouses under management to about 74-hectares under-glass, worth $323m.

The big drawcard is the long leases on the assets that now top 18 years and the move cements Centuria as Australia’s biggest large-scale glasshouse landlord.

The fund was set up this year as an new alternative vehicle for the group and its growth has been extremely rapid, proving popular with both Centuria’s retail and private bank investment clients.

The acquisition also lifted Centuria’s agricultural assets under management to $500m.

Centuria joint chief executive Jason Huljich said the firm intended to “strategically grow” its business across alternative real estate sectors, including agriculture.

“We believe strong demand fundamentals will drive continued investor interest in agricultural real estate and Centuria will continue to seek high quality assets, leased to reputable operators with strong sustainability credentials in high revenue producing sectors such as protected cropping,” he said.

“We have developed a healthy acquisition pipeline of assets which suit the CAF investment profile and expect total agriculture assets to exceed $600m during fiscal 2023 and continue to grow rapidly in fiscal 2024,” he said.