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- Rural Funds Management, a subsidiary of Rural Funds (RFF), signs an agreement to lease up to 3000 hectares of its macadamia orchards to a joint venture for 40 years
- The lease covers orchards in Maryborough, Bundaberg and Rockhampton, and will initially consist of 1200 hectares, followed by the remaining 1800 hectares in FY24
- Rent will be paid on cumulative capital expenditure at a comparable rate to other similar leases
- A $40 million loan will be provided to Rural Funds once the lease begins, plus an additional $60 million during the balance of the development
- RFF ends the day 1.18 per cent in the green to close at $2.58
Rural Funds Management, a subsidiary of Rural Funds (RFF), has signed an agreement to lease up to 3000 hectares of its macadamia orchards to a joint venture for 40 years.
The agreement will see joint venture parties The Rohatyn Group (TRG) and an unnamed global institutional investor lease orchards in Maryborough, Bundaberg and Rockhampton, Queensland.
There will be an initial 1200 hectares, followed by the remaining 1800 hectares in FY24, subject to the completion of a water supply for the Rockhampton orchard.
Rural Funds Management and its subsidiary RFM Macadamias will provide the joint venture with orchard development and management services.
Rent will be paid on cumulative capital expenditure at a comparable rate to other similar leases.
There’ll be an annual indexation within 1.5 to 2.5 per cent, as well as a profit share above a certain threshold.
A $40 million loan will be provided to Rural Funds once the lease begins, plus an additional $60 million during the balance of the development.
Debt is to be repaid with interest over seven years.
The lessee will be able to terminate the lease on a few conditions, including if the orchard fails to produce a 3.6 tonne yield per hectare over a five-year period.
Rural Funds is now waiting for the lease’s approval from the Foreign Investment Review Board.
RFF has ended the day 1.18 per cent in the green to close at $2.58.
