Rural Funds’ (ASX:RFF) responsible entity, Rural Funds Management (RFM) has exchanged contracts for a 27,879 hectare cattle and cropping property acquisition.
The four properties, collectively referred to as ‘Kaiuroo’, are located in central Queensland. The acquisitions are consistent with RFM’s strategy of acquiring assets with potential for productivity improvements, in agricultural sectors in which RFM has operating experience and Australia has a comparative advantage, said the company.
Included in the purchase is 12,448 ML of water entitlements. RFM plans to utilise the water entitlements to improve the productivity of the properties. Productivity developments include expanding irrigated cropping areas and increasing cattle carrying capacity through pasture improvement and additional water points.
A deposit of $17.2 million, 25 per cent of the purchase price is expected to be paid in November 2021, funded from RFF’s debt facility. RFM has negotiated an extended settlement period of up to 24 months, which allows RFM to commence productivity developments and seek a lessee prior to settlement.
RFF will receive interest on the deposit amount prior to settlement. Forecast FY22 adjusted funds from operations of 11.8 cents per unit and distributions of 11.73 cents per unit remain unchanged.
Shares in Rural Funds Group (ASX:RFF) are trading 0.7 per cent lower at $2.91.