Vitalharvest hungry for more farming property

ASX-listed trust Vitalharvest, owner of seven properties leased to horticultural powerhouse the Costa Group, is set to expand and diversify beyond citrus and berry farms.

Expanding: Blueberries at Sulphur Creek on Tasmania's North West Coast, owned Vitalharvest and leased to Costa Group.

VITALHARVEST Freehold Trust is set to diversify away from leasing citrus and berry farms to Australia’s largest horticultural producer, Costa Group, and instead look at buying farms, packing sheds and cool store facilities.

Vitalharvest’s new majority owner and manager, Primewest Group, has revealed talks are underway about sale and leaseback opportunities across Australia.

Primewest bought a controlling stake in ASX-listed Vitalharvest in June. Around the same time it also took over management of the trust – which owns the largest aggregations of berry and citrus farms in Australia, all leased to Costa Group – after buying out former manager goFARM Asset Management from goFARM Holdings for $10 million.

Primewest owns $4.5 billion of commercial, industrial and agricultural property and has recently ventured further into agriculture, announcing it would invest $100 million into the sector.

Primewest director David Schwartz said Vitalharvest, whose chair is John Bond – son of the late high-profile businessman Alan Bond – was looking to add to the trust’s portfolio of berry and citrus propertiestoinclude investing in processing, storage and logistics facilities, with the focus to remain on food production and high yielding crops.

“There are numerous opportunities we’re looking at, all under investigation to see what suits the portfolio best,” Mr Schwartz said.

He said long-term leased assets in agriculture with secure water were the focus.

Talk of diversification follows word that Primewest and its lessee Costa Group were having “issues”, as raised by an audience member in aninvestor briefing on Monday. But the Mr Schwartz said he was unable to divulge any details, only to say “we’re trying to resolve them”.

Mr Schwartz told The Weekly Times having a single tenant had encouraged a push to diversify Vitalharvest’s portfolio. “It’s mainly diversification in (geographical) area and tenant,” he said.

Vitalharvest owns three citrus farms in SA’s Riverina and four berry farms across NSW and Tasmania.

Its earning slid almost 16 per cent in the 12 months to June 30, to $8.8 million. The hit has been attributed to Costa’s rent being 31 per cent lower than the previous year due to smaller fruit across its citrus farms, high water prices due to ongoing drought conditions, a lack of water at its Corindi berry farm and bushfire damage at its Tumbarumba berry farm. A component of the rent is calculated on Costa’s earnings.

Vitalharvest will pay a dividend of 4.75c a share.

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