Australia-based agricultural investment manager Growth Farms is planning to raise A$100 million for a new fund that aims to purchase and lease back rural properties across the country, The Australian Financial Review reported.
About 20 properties in four areas and five sectors will seed Australian Agricultural Lease Fund. The new fund will target net returns of between 10% and 12%, including a yield of 4.5% from leasing back the properties to farmers, the report noted.
David Sackett, managing director of Growth Farms, told the publication that the fund will acquire smaller farms to meet the leaseback yield.
Sackett also talked to the AFR about how agricultural property investors have been looking for a platform that takes away the risks of commodity prices and climate and has little to do with other asset classes.
Growth Farms is managing about A$430 million of farms and lists Providence Wealth, an investment advisory group handling A$1 billion of client funds, as cornerstone investor, according to the June 17 report.