This article is from the Australian Property Journal archive
RURAL Funds Group is trading nuts for nuts, putting proceeds from the $98 million sale of a New South Wales almond orchard towards the conversion of 5,000 hectares in central Queensland into macadamia orchards.
The group also revealed yesterday full year adjusted funds from operations per unit of 13.5 cents, and distributions of 10.85 cpu. It reaffirmed FY21 forecast distributions of 11.28 cpu in line with its 4% growth target, funded from AFFO forecast of 11.7 cpu.
“The positive FY20 results are largely due to the ongoing expansion of the portfolio, primarily in the cattle sector, and independent valuations of various assets,” it said.
Property revenue increased 8% to $72 million. Earnings increased 82% to 18.4 cpu and adjusted net asset value by 8% to $1.94 per unit.
Contracts have been exchanged to offload the Mooral almond orchard with a “global agriculture and timberland investment manager as nominee for a special purpose vehicle that will be owned by pension funds and institutional investors”.
The group has also committed to acquire properties that along with prior acquisitions, including part of the 5,409 hectares of sugar cane farms recently acquired for $81 million, will be converted to macadamia orchards.
“The investment into macadamias is consistent with RFM’s strategy of investing in sectors in which Australia participates globally, improving portfolio diversification, and utilising RFM’s development and operating knowledge.
“These developments are expected to provide ongoing earnings growth in future years,”
Rural Funds Management Limited currently farms three orchards in Bundaberg.
Planting of macadamia trees on the new properties is expected to commence late in the 2021 financial year and lessee discussions are ongoing. RFM plans to lease the assets as cattle and cropping operations to further improve AFFO in the interim.
Funding for acquisitions also includes the proceeds from the sale of the poultry assets at the end of 2019.
RFM has 61 properties across almonds, cattle, cropping, vineyards and macadamias, with 78% leased to corporate and/or listed entities. The portfolio has a weighted average lease expiry of 10.9 years.
