PGIM Real Estate has expanded its agriculture financing platform beyond North America for the first time, entering Australia with 10-to-15-year long-term, fixed-rate financing solutions.
PGIM Real Estate announced on March 18 an exclusive partnership with specialist agricultural debt provider Foundation Agri Finance. It closed its first transaction at the end of 2023, providing a loan to a “diversified horticultural business”.
Australia is a “robust agriculture-producing nation”, says PGIM Real Estate. According to Australia’s Department of Agriculture, Fisheries and Forestry, the value of the country’s agricultural production is forecast to rise by 6% to A$85 billion ($74.71 billion) in 2025.
The market for financing farming operations is dominated by Australian banks that typically provide short-term, floating-rate loans, says PGIM Real Estate. Hence, it sees an opportunity to provide an alternative with long-term, fixed-rate loans.
PGIM Real Estate aims to grow its Australian loan book to over A$1 billion over the next five years, according to Rachelle Schlesinger, head of agriculture finance.
“We have big ambitions for the Australian market as we grow our agricultural financing platform’s international presence. We aim to offer competitive financing solutions to leading farmers and agribusiness across Australia,” Schlesinger adds. “Importantly, our operational infrastructure is already in place given our existing commercial real estate business in Australia.”
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PGIM opened in Australia in 2011 with commercial real estate and private credit investment experts on the ground.
PGIM Real Estate is a business of PGIM, the global asset management business of Prudential Financial. They are not affiliated with Prudential plc, incorporated in the UK; or with Prudential Assurance Company, a subsidiary of M&G plc, also incorporated in the UK.
PGIM manages US$310 billion ($414.73 billion) in private alternative strategies across real estate, agriculture, private credit and private equity. These strategies are managed by PGIM Real Estate, PGIM Private Capital and Montana Capital Partners.
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PGIM Real Estate has been active in agricultural lending for 120 years with a business focused on the US. PGIM Real Estate’s agricultural investment platform has grown from US$4 billion in assets under management 10 years ago to US$10.8 billion today.
Foundation Agri Finance is a private agricultural debt provider founded in 2023. Headed by former Rabobank executive David Haydon and former MLC chief investment officer Natalie Meyenn, Foundation Agri Finance aims to provide better ways to finance the evolving needs of farmers and agribusinesses.
Haydon, founder and executive director of Foundation Agri Finance, says lending to Australian agriculture businesses has become “increasingly short-term” and “less about the customer”. “We want to reverse this trend and offer long-term financing solutions that are built around the needs and goals of each customer.”
