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Rural Funds Group acquiring a 1728-hectare cattle property in New South Wales

The acquisition is consistent with the fund’s strategy to acquire assets which may benefit from productivity improvements.
cow
Capital expenditure will attract additional rent

Rural Funds Group (ASX:RFF) is acquiring Dyamberin a 1,728 hectare cattle property located in the New England region of New South Wales for a purchase price of $13.4 million.

RFF’s investment objective is to generate a stable income stream derived from leasing its assets to suitable counterparts and to achieve capital growth through appreciation in the value of those assets.

Lease includes a rent review in year five

Stone Axe Pastoral Company, a Wagyu producer that operates two properties in the region, has already entered into a ten-year lease for Dyamberin.

The lease rate is consistent with existing RFF cattle property leases and a security deposit equal to six months’ rent will be provided by the lessee.

Dyamberin has the potential for productivity developments. Notably, development capital expenditure will attract additional rent and the lease includes a rent review in year five.

The acquisition is consistent with RFF’s strategy to acquire assets which may benefit from productivity improvements and add to the frequency of rent reviews.

Current FY19 forecast adjusted funds from operations of 13.2 cents per unit and distributions of 10.43 cents per unit remain unchanged.

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