The corporate moves in wine continue with two vineyards sold for $62.5m

Australian Vintage Limited says the sale price was more than double the book value of the pair which together produce 23,000 tonnes of wine grapes each year.

The buyer is agricultural investor Warakirri Asset Management which signed a 10-year sale-and-leaseback deal with AVG which involves the vineyards and substantial water entitlements.

The two vineyards are the Coldridge vineyard in the Riverland and the Grande Junction vineyard in Pomona, across the Murray River from Mildura.

AVG says it crushes about seven per cent Australia's total production with well known wine brands of McGuigan Wines, Tempus Two, Nepenthe and the Barossa Valley Wine Company.

AVG said the sale "underpins the execution of our strategic plan including acquisitions and reducing debt".

Only last week, Australia's biggest family owned winemaker announced it had found a partner, a Canadian one.

A long-term partnership has been signed between Southern Premium Vineyards and the Casella family.

SPV, is owned by Canadian pension fund PSP Investments, which will buy a number of vineyards in South Australia and NSW from Casella.

SPV already owns 460 hectares of vineyards in the Coonawarra and Barossa Valley regions.

SPV's arrangement with Casella covers vineyards totalling 7215 hectares across 35 properties.

Warakirri Asset Management is one of Australia's largest agricultural fund managers, managing assets for local investors as well as pension funds in North America and Europe with $3.5 billion under management.

Warakirri also has substantial investments in cropping and dairying.

Warakirri's Aurora Dairies owns and operates dairies in Gippsland and southeast South Australia with 33 dairy farms and six youngstock properties totalling about 13,600 hectares, milking over 22,900 cows.

With this latest deal, the two vineyards take in 1300ha and 3700 megalitres of water.

AVG will continue to manage and operate the vineyards.

Warakirri and AVG say they will work together on vineyard developments to continue to maximise the yield output.

The Warakirri Farmland Fund was launched in 2021 and developed specifically for domestic and offshore institutional investors, after securing significant seed funding from one of Europe's largest pension funds.

MORE READING: Some of South Australia's biggest farm sales of 2022.

Warakirri is also partnered with a large institutional investor headquartered in Chicago, Mesirow Financial Currency Management

The Foreign Investment Review Board has already approved this sale which is expected to settle later this month.

AVG's chief executive Craig Garvin said: "We are really pleased to be able to work with Warakirri, known for their world class capability within the agricultural sector, on this opportunity."

Mr Garvin is a former CEO of dairy company Parmalat and took the place of Neil McGuigan as CEO of Australian Vintage in 2019.

"Warakirri have committed to further enhance and develop the vineyards thereby improving yield output and avoiding a large drain on our own capital resources," Mr Garvin said.

"This deal unlocks significant value from our balance sheet that allows us, in very challenging market conditions, to pay down debt, to continue to invest in our brands, and consider higher margin acquisition opportunities."

Earlier this year, Warakirri bought 250ha of stone fruit orchards in Goulburn Valley and Cobram to lease to fruit grower, W. F. Montague.

Already Australia's leading packer and marketer of stone fruit, Montague is expanding its stone fruit production footprint under the 20-year lease partnership to become one of the largest growers of premium plums, nectarines, apricots and peaches.

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