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TPG takes Ingham properties to market

10-Mar-2014


Private equity giant TPG officially has put on the block the $600 million-plus portfolio of properties out of its Ingham Enterprises poultry operation, less than a year after picking up the operation from billionaire Bob Ingham.

The group, which edged out rival Blackstone Group for the company that sells one in three chickens in Australia and owns one of the country's largest private property portfolios in an $880m deal, is making the classic private equity move of selling the lower returning property assets.

While TPG could be expected to extract some immediate returns from the asset sales, the emphasis is on keeping the business growing, perhaps with a future exit in mind.

"Ingham is, as always, committed to growing the business and the nature of the sale and leaseback agreements enables us to continue to offer our customers the highest levels of quality and service. The day-to-day operations will continue to run as usual," Ingham's chief executive Kevin McBain said.

The offer of the properties is geared to tap into global institutional interest in two asset classes: agricultural land and industrial properties.

Both asset classes are running hot and the private equity group has split the offer into two tailored portfolios that are being offered on a sale and leaseback basis. The bulk of the value of the 53 properties lies in the industrial sites, rather than the farms, which would appeal to more specialist listed and pension fund investors.

Real estate group CBRE has been soft marketing the properties to global firms for some time, sparking rumours that TPG might look to set up a trust for the real estate. But it appears that a disposal could be more lucrative as the institutional sales market is running hot, with more than $24 billion worth of properties changing hands last year.

CBRE's Danny Thomas and Mark Granter, who are running the sale, noted it involved industrial and agricultural properties across Australia and New Zealand. "The properties are strategically located across Australia and the North Island in New Zealand and are, with one exception, being offered on lease terms of 20 years with five further 10-year options," Mr Granter said.

The industrial portfolio includes processing plants, feedmills and hatcheries; the second portfolio comprises agriculture assets, mainly breeder farms.


The Australian
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