Costa Asset Management gauges investor interest for new REIT
Costa Asset Management has kicked off a non-deal roadshow for a new real estate investment trust.
Costa Asset Management has kicked off a non-deal roadshow for a new real estate investment trust.
As revealed by Street Talk on Tuesday, Bell Potter is in Costa's corner as the company meets with local investors to weigh a transaction.
The REIT would have a valuation of $250 million to $300 million, including debt.
Costa Asset Management is chaired by Robert Costa, who co-founded ASX-listed Costa Group with his brother and former Geelong Football Club chairman Frank Costa .
The properties leased to Costa Group include blueberry and raspberry farms in the coastal northern New South Wales town of Corindi; blueberries in Tumbarumba, blueberries, raspberries and blackberries near Devonport, northern Tasmania; and citrus in the Riverland region of South Australia.
Earlier this year, Costa Asset Management is said to have appointed Kidder Williams to field offers for 14 properties including those operated and leased by Costa Group. Kidder is now said to have a broad advisory role which includes work on the proposed REIT, sources said.
The leases for the Costa Asset Management farms expire in 2026, with options to renew.
The properties also entitle the owner to a fixed rent and a share of earnings from Costa Group's berries and citrus businesses. That means there are variable and fixed revenue components for the REIT's sales.
Interestingly, when Costa listed on the ASX two years ago, several investors raised concerns about related party transactions between it and privately held Costa Asset Management.
In June, Costa Group chief executive Harry Debney told The Australian Financial Review: "If they did look to sell them, we may or may not be interested in buying them.
"They are not a dominant part of our portfolio, we have in excess of 40 farms."