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Real estate funds manager Centuria Capital Group (ASX: CNI) has given its portfolio of agricultural investments a hefty lift to $1.3 billion by acquiring the management rights to Arrow Primary Infrastructure Fund (APIF), an unlisted agricultural real estate fund which controls assets worth $444 million.
The deal follows Centuria last week adding Australia’s largest glasshouse to its growing portfolio of agricultural assets in a $168 million deal with Fresh Country Farms of Australia.
The acquisition of Arrow Funds Management, which is the responsible entity for APIF, and its stapled operating fund Arrow Operations Trust represents a multiple of 5.5 times EBIT after synergies are implemented.
Although the value of the acquisition has not been disclosed, Centuria says the deal is expected to be accretive to the group’s future earnings profile and consolidates its position as a leading fund manager in the alternative agricultural real estate sector.
The acquisition has boosted Centuria’s agriculture assets under management (AUM) by 85 per cent to $1.3 billion since 1 July this year.
APIF comprises a portfolio of 22 properties that at the end of FY25 were valued at $444 million with a 12.7-year weighted average lease expiry,
The assets are leased to leading Australian primary production tenants, including Baiada Poultry Group, Select Harvests, Nutrano Group, Pace Farms and SunPork Group.
Among the assets are poultry farms, a pork fattening facility, almond and macadamia orchards, mango orchards, dried-fruit vineyards and an organic glasshouse.
Centuria says it existing agriculture division, which covers a range of commodities and geographies, delivers a “clear opportunity” to support APIF’s further growth via Centuria’s investor network.
“This acquisition adds further scale and operational expertise to Centuria’s agriculture division,” says John McBain, Centuria’s joint CEO.
“Centuria’s growth in agricultural real estate has been part of a deliberate strategy to diversify into high conviction alternative real estate sectors, which we commenced in the post-COVID period and have subsequently scaled beyond $1 billion of AUM.
“Centuria has an established record for successfully integrating complementary funds management businesses and we look forward to offering APIF’s private clients the same high level of service they have enjoyed in the past.
“Centuria has a mature private client investor base, which has supported its funds management platform for more than 30 years and we are experienced in understanding and responding to the specific needs of private investors.”
Jason Huljich, Centuria’s joint CEO, says the group is looking forward to meeting Arrow investors in person to gain “a better insight into their investment goals”.
“We also anticipate being able to offer carefully selected agricultural investment opportunities to enhance the Arrow portfolio by applying the proven disciplined methodology that has guided Arrow’s achievements over the years,” says Huljich.
“Arrow has been led by an experienced, agricultural specialist, Andrew Ashbolt. We are delighted to welcome Andrew to our APIF Investment Committee where he will work alongside our team to ensure legacy knowledge is retained and investor relationships are maintained seamlessly.”
APIF assets are located across NSW, Victoria, South Australia and the Northern Territory and are predominantly leased on annual CPI-linked rental escalations.
"This transaction delivers major geographic and commodity diversity, focused on efficient protein production by Australia’s leading farmers,” says Andrew Tout, Centuria’s head of agriculture.
“We look forward to working with the Arrow Team to drive stability and growth."
Centuria is funding the acquisition through existing cash and undrawn debt.
The current Arrow management team will transition across to Centuria, with Arrow Funds Management CEO Andrew Ashbolt assuming a new position on Centuria’s APIF investment committee, which the group says will assure seamless service delivery to clients.
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