- Agricultural business, Alterra (1AG) has secured a 300-hectare avocado project in Pemberton, Western Australia
- The project is called the "Carpenters Project" and is the first-large scale avocado project for the company
- The lease for the project is up to 50 years
- Alterra's subsidiary, Carpenters Beedlup, will be building the avocado farm
- This project is the cornerstone to launch a new business model in Western Australia
- Alterra remains in the grey on the market today, selling shares for 3¢ each
Agricultural business, Alterra (1AG) has secured a 300-hectare avocado project in Pemberton, Western Australia.
The project is called the "Carpenters Project" and is the first-large scale avocado project for the company.
A special-purpose vehicle (SPV), Carpenters Beedelup, has been found to build the Carpenters Project and in the future will look to raise capital for the development.
Following this, Alterra intends to maintain a direct equity interest.
Currently, SPV is a subsidiary of Alterra.
The SPV has secured a 30-year lease, with a 20-year option, to build, own and operate a 300-hectare avocado orchard, which when developed will be one of the largest single avocado projects in Australia.
Alterra is committing to an initial $350,000 to SPV's working capital purposes.
The SPV will act as the holding company for the Carpenters Project, with plans for development capital to be sourced from investors and family offices to help fund the establishment of the avocado farm.
The Avocado Project
The project is expected to produce between 20 to 30 tonnes of avocados per hectare per annum - this is when the avocado trees are at a mature age (nine years).
Avocado demand in Australia has continued to rise with estimated farm-gate prices paid to farmers in Pemberton from the most recent harvest (September 2019 to January 2020) ranging from $5.44 to $9.38 per kilogram.
However, these prices are from the recent harvest and are not an indication of the future price of the fruit.
Managing Director Oliver Barnes says the site is exceptional with a favourable climate, reliable rainfall, excellent soil types and quality water, which makes this site a high-value asset for Alterra.
"The Carpenters Project is a significant opportunity to launch Alterra’s new business model with an outstanding asset supported by quality management," he said.
“This is the first of several planned projects for Alterra and I am pleased to say the Company’s opportunity pipeline is strong," he added.
Over the past twelve months, there has been a strong demand in Australian agricultural with billions of dollars invested into the industry.
“The Australian market for developed assets of this quality is currently dominated by international funds but we believe that they will see a strong increase in competition from Australian funds, including industry super funds," Oliver explained.
“Over the coming months, we will conduct detailed engineering studies, soil testing and financial due diligence, in combination with arranging the development capital required to bring the full project to fruition,” he added.
Alterra remained in the grey on the market today, selling shares for 3¢ each at market close.