Friday, March 31, 2023

US investor offloads Qld cattle property for $69m

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Kaiuroo aggregation. Photo: Australian Property Journal

ASX-listed Rural Funds Group (RFF) has added to its Fitzroy River Basin holdings, picking up the 27,879-hectare Kaiuroo cattle and cropping property aggregation in Central Queensland’s Mackenzie River district for nearly $69 million, well above the expectation price of $55 million.

The four properties are about five kilometres to the west of RFF’s Cerberus cattle property, while it has also just paid $13.8 million for the 1,917 hectare The Pocket, neighbouring its Comanche backgrounding and breeding cattle property and to which it has started planting macadamias.

At the end of last year, it acquired a $32.4 million Fitzroy River water allocation.

RFF’s responsible entity and manager, Rural Funds Management Limited (RFM) said the Kaiuroo acquisitions are consistent with its strategy of acquiring assets with potential for productivity improvements, in agricultural sectors in which it has operating experience and Australia has a comparative advantage.

Included in the purchase is 12,448 megalitres of water entitlements, which RFM plans to utilise to improve the productivity of the properties. These will include expanding irrigated cropping areas and increasing cattle carrying capacity through pasture improvement and additional water points.

New York-based vendor, investment firm The Rohatyn Group put the aggregation to the market through Elders in June with initial expectations for over $55 million, looking to capitalise in particular on the strong beef and cattle market.

Located some 220 kilometres west of Rockhampton, the aggregation comprises the 5,889-hectare Kaiuroo, Coreen (4,528 hectares), Eskfield (3,636 hectares) and Yambuk (17,914 hectares).

Kaiuroo’s production system includes Certified Organic beef for domestic and international markets, genetically evaluated Grey and Red Brahman commercial and seedstock herds, large-scale irrigation, and irrigated and dryland crops.

The aggregation has carried between 4,000 and 7,400 head of cattle over the last four years.

The cropping area includes 1,650 hectares with organic certification, 917 hectares of which is irrigated.

A deposit of $17.2 million, equal to 25% of the purchase price, will be paid this month, funded from RFF’s debt facility. RFM negotiated a settlement period of up to 24 months, allowing it to commence productivity developments and seek a lessee prior to settlement.

Its forecast FY22 adjusted funds from operations of 11.8c per unit and distributions of 11.73c per unit remain unchanged.

RFF’s acquisition of The Pocket was part of the cattle and irrigated fodder portfolio put to the market by THF Finance Pty Ltd, which netted the German family office for more than $100 million combined.  Spanning 21,900 hectares west of Rockhampton, it also included the 9,212 hectare Lucie Station at Bluff, as well as Mostowie (3,859 hectares), Karamea (3,744 hectares), and Bindaree (3,168 hectares).


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