Inghams property at Somerville.
Private equity giant, TPG, the owners of the Ingham Enterprises, the country's largest integrated poultry company, is looking to raise more than $650 million through the 'once in a generation' sale and lease back of two significant property portfolios.
The assets comprise 53 industrial and agricultural properties across Australia and New Zealand, with the cash to be reinvested into the growth of the business.
TPG paid $880 million in March last year for the business from the sole patriarch Bob Ingham, who is now focussed on his horse racing business.
It was recently speculated that TPG could put the properties into an unlisted property fund, but they have instead opted to go down the sale and leaseback path.
CBRE is the selling agent, but declined to comment on the possible sale price.
In a statement, Kevin McBain, Ingham's chief executive said the sale of the two property portfolios would release capital and provide the group with an opportunity to invest in business growth and improvement initiatives across our poultry and stockfeed operations in Australia and New Zealand.
CBRE's Danny Thomas and Mark Granter said the size and scope of the two portfolios and the strength of the lease covenant to Ingham was expected to drive considerable local and offshore buyer interest in the campaign.
''The properties are strategically located across Australia and the North Island in NZ and are, with one exception, being offered on lease terms of 20 years with five further 10 year options," Mr Granter said.
The properties have been divided on a specialisation basis into two portfolios with Portfolio 1-Industrial including processing plants, feedmills and hatcheries and Portfolio 2-Agricultural/Rural comprising of breeder farms.
"The sale represents a once in a generation opportunity to acquire such an extensive and strategic group of properties. A key attraction for buyers would be the structure of the lease agreements to Ingham, one of the region's most respected poultry companies,'' Mr Thomas said.
The majority of the properties are located within close proximity to major urban centres, with a number located within well-established and highly regarded industrial locations.
"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," Mr McBain said.
Freeing up cash
Many companies have undertaken the sale and lease back of properties over the past two decades. The retailers, Coles and Woolworths, all the major banks and most corporations now lease the buildings.
The proliferation of real estate investment trusts in the 1980s helped facilitate the process. These trusts allow the assets to be owned independently, allowing the companies to realise the ''idle'' cash that had been tied up in land and buildings and use it for business expansion. That also allowed companies to avoid having to raise cash from shareholders or via a bank loan, which increased the debt levels.
Possible buyers of the Ingham portfolios include REITs such as Goodman Group, although it is looking more at overseas expansion or private investment companies.