This article is from the Australian Property Journal archive
MACADAMIA developments provided a boost to Rural Funds Group (RFF)’s FY24 revenue, with the growing sub-sector of the agricultural real estate investment trust; $2 billion portfolio on its way to providing more income in the years ahead.
Property revenue increased 8.0% over the year, or $6.5 million, to $88.4 million, primarily due to additional rental income earned on macadamia developments.
The 3,000 hectares of macadamia developments which kicked off in 2021 are on track to be materially complete at the end of 2024, despite above-average rainfall delaying proceedings.
“The 40-year lease associated with the assets is forecast to generate 18% of FY25 total revenue and increase in future years as additional capex is deployed,” RFF said.
During the period, the second tranche of the macadamia development lease commenced, representing $133.9 million of assets, following issuance of Rookwood Weir water entitlements.
Adjusted funds from operations (AFFO) increased 2.8% over the year to 11.0c per unit. Earnings came in at 30.3c per unit, or $117.2 million, largely driven by property revenue and independent property valuations.
The valuations for $1.2 billion of assets, representing 69% of the portfolio, resulted in a net valuation uplift of $97.3 million. The 67-asset portfolio spans five agricultural sectors and multiple climatic zones, has a 13.5-year weighted average lease expiry with leases predominantly triple-net structure.
Adjusted net asset value increased 7.2%, or $0.21, to $3.14 per unit.
Distributions per unit was 11.73c, in line with forecasts.
RFF is expecting AFFO growth of 3.6%, to 11.4 cpu, and distributions of 11.73 cpu.
RFF increased its facility limit providing funding for FY25 capex primarily for the continuation of macadamia developments.
In June, RFF leased and sold a 50% interest in two cropping properties in Central Queensland in a $39 million transaction.
“Other assets within the group continue to be developed. Management will pursue leases and partial sales of additional assets, seeking to improve earnings, operating exposure and gearing,” RFF said.
RFF put 225,800 hectares of cattle country in Queensland’s Gulf of Carpentaria region to the market in May, via the 140,300-hectare Mutton Hole and 85,500-hectare Oakland Park properties. Expectations for the aggregation are of more than $50 million.
RFF’s manager, Rural Funds Management, has been shopping around the 1,728-hectareh Dyamberin, on the New England Tablelands, hoping for more than $20 million.
