W.P. Carey Completes First Australian Investment with Sale-Leaseback Agreement for Industrial and Agricultural Portfolio

By Alex Girda, Associate Editor

Australia—Global net-lease real estate investment trust W.P. Carey has completed yet another international acquisition. The company recently announced that it closed a 20-year sale-leaseback deal with Inghams Enterprises Pty. Limited, for a portfolio of 31 properties in the Australian market. The properties are industrial and agricultural and were acquired for a fee of $138 million, 157 million in AUD.

Inghams is the largest poultry producer in the country of Australia, and is one of the best-known food brands in the area. For the fiscal year ending in March 31, 2014, the company saw a revenue level of approximately $2.1 billion, and a market share estimated at 35 percent. The company has been also doing well as a result of its long-term contracts with fast-food chains such as McDonald’s and KFC, as well as its status as supplier to the country’s largest supermarket chain. The company is currently under the ownership and management of global private investment firm TPG, who acquired Inghams in the summer of 2013. The real estate properties involved in the transaction are now all part of 20-year triple net-lease agreements.

According to Grace Shui, managing director of W.P. Carey Asia, the sale-leaseback deal perfected with Inghams “represents W.P. Carey’s first investment in Australia and reflects our established position as a source of financing for creditworthy private equity-sponsored and privately held companies, as well as our strategy of owning and expanding a well-diversified real estate portfolio.” The CEO of Inghams, Kevin McBain, notes that the transaction would allow the seller to “strengthen our balance sheet and accelerate our strategic growth plans.”

The transaction was made for a number of crucial real estate assets for the company’s business in Australia. The buildings comprise a very large chunk of the company’s long-term supply chain infrastructure for raw materials, and are strategically located within the company’s state-of-the-art logistics system. All of the assets allow for future expansion and are constructed to provide the means for increased production.