Real estate investor Qualitas raises AUD200m for food infrastructure fund

Australian real estate investment firm Qualitas has raised more than AUD200m (€125.3m) from investors for a food infrastructure fund.

Qualitas, which launched the AUD400m close-end Food Infrastructure Fund, has seeded the fund with assets acquired from Australian flour supplier Allied Pinnacle.

Andrew Schwartz, Qualitas group managing director and CIO, said the fund raised more than AUD200m in equity from European and Asian pension, life insurers and Australian ultra-high net worth investors.

Schwartz said the fund remains open for subscription.

Qualitas has negotiated a sale-and-leaseback deal with Allied Pinnacle to buy its 10 flour-milling and bakery operations across Australia for AUD400m.

“The reason we call it an infrastructure fund is because wheat and flour is a very important staple ingredient, constituting more than 20% of the Australian diet,” Schwartz told IPE Real Assets.

“Given the very long-term nature of the cash-flow and fixed (rental) escalation, it is a very infrastructure-like investment.”

Mark Fischer, Qualitas’ managing director, principal investments, described the assets as “soft infrastructure” and the Qualitas Food Infrastructure Fund as a “unique offering”.

“It has elements consistent across real estate, infrastructure and agricultural investment, and brings benefits from each sector,” he said.

“Our thesis is that there is a developing universe of ‘cross-over’ investors from each of those sectors who are increasingly focussed on what we call “soft infrastructure.”

The assets, said Fischer, will deliver long-duration income without the regulatory risk that comes with hard infrastructure – or the tenant demand vagaries of traditional real estate.

The portfolio is expected to provide a yield of 6%.

James Ajaka, Allied Pinnacle CEO, said: “This partnership will allow us to maintain full operational control of our business, while Qualitas takes ownership of a great suite of properties.”

Allied Pinnacle, a supplier of flour in Australia, will maintain full control of its operations at the sites.