Primewest in $10m agriculture buy

Property fund manager Primewest has purchased a national agricultural asset management company for $10 million, two days after establishing a $300 million fund targeting neighbourhood shopping centres.

Perth-based Primewest said it had bought goFARM Asset Management, as well as nearly a 12 per cent stake in ASX-listed Vitalharvest Freehold Trust, which is managed by goFARM.

Primewest has also acquired a right of first refusal over a further 6.2 per cent interest in Vitalharvest.

The trust comprises around $275 million in agricultural property assets, with a market capitalisation of approximately $143 million.

Vitalhealth owns a combination of berry and citrus farms, which are 100 per cent leased to Australia’s largest horticultural company, Costa Group.

The transaction, funded by Primewest’s existing cash reserves, will increase the company’s assets under management by 7 per cent to $4.4 billion.

Chairman John Bond said the purchase supported Primewest’s strategy to expand its distribution capability into listed Australian retail estate investment trusts.

“Importantly, Primewest will co-invest along with other Vitalharvest investors as its largest investor,” he said.

The transaction leaves Primewest with $43 million in available cash.

Primewest is seeking to partner with Vitalhealth on future developments and acquisitions, with the intention of establishing a pipeline of investment-grade assets.

The goFARM board has been replaced with Primewest representatives Jim Litis and David Schwartz, with Mr Bond as chairman.

goFARM’s key personnel, including former managing director Liam Lenaghan, will provide transitional services over the next three months.

Vitalhealth will be renamed the Primewest Agri-chain Fund.

The purchase comes two days after Primewest launched a $300 million neighbourhood retail property trust, which will include the 2.1-hectare Spring Farm Shopping Centre in Sydney, acquired from Woolworths Group.

Mr Bond said a number of retail assets had performed well during the coronavirus pandemic.

“This made a new retail trust highly attractive, especially given the defensive nature of the Spring Farm centre which had proved to be very resilient and therefore highly attractive as an investment,” he said.

Mr Bond said the Woolworths supermarket performed strongly at the centre.

Other facilities include a McDonald’s, KFC outlet, and a Caltex service station, which Mr Bond said added to the overall appeal of the centre.

Primewest had also set up a fund to purchase Seven West's 425ha headquarters in Osborne Park for $75 million, with the deal completed last month.