Cheviot Bridge has agreed to acquire the South Australian-based vineyard managers the Kirribilly Group, in a move that will see Cheviot establish the second largest listed vineyard property trust in Australia.

The chairman of Cheviot, Paul Batchelor, said the acquisition would give the company, which listed on the Australian Stock Exchange last year, a strong strategic platform for its growth.

Batchelor added that Cheviot intended to list the new trust, to be known as Cheviot Kirribilly Vineyard Property Trust, within the next six months.

"This is an exciting opportunity for Cheviot shareholders, allowing the company to diversify from purely distributing and marketing wines into wine industry asset management," he said. "We will do this by creating a high yield vineyard property trust that will provide a different income stream with substantial growth potential."

Under the deal, Cheviot will manage the Trust, which is expected to have assets worth nearly A$44m, including 842 hectares of mature vineyards in South Australia. On top of this, Cheviot will manage another 323 hectares of vineyards worth over A$1m outside the Trust. While these additional vineyards did not currently meet the return requirements of the Trust, Cheviot would manage them with the objective of improving their returns so that the Trust could offer to acquire them in the future.

The principles of Kirribilly, Sean Edwards and Rob Stanway, will join the board of Cheviot Bridge as executive directors and as managing directors of Cheviot Asset Management and Kirribilly Viticulture Pty Ltd, respectively.

Batchelor said that industry experts had forecast that about 20% of Australia's vineyard assets would be securitised over the next five years, providing the Trust with opportunities to buy assets at affordable prices and reap the rewards as prices firmed in the short to medium term.

"We are confident that our new asset and viticulture management business will grow rapidly and be equal to or larger than our existing wine marketing business," he said.

"We expect the Trust to have a high yield, with a target of 11%, and to seek significant growth through the acquisition and development of a diversified portfolio of Australian vineyard and viticulture assets over the next five years."