Rural Funds Group Acquires Central Queensland Cattle Property

Rural Funds Group, an ASX-listed property trust, has acquired Comanche, a 7,600-hectare cattle property, near Rockhampton in Central Queensland for $15.7 million.

The property was purchased at auction last week. Comanche includes nine kilometres of Fitzroy River frontage and has an 864-megalitre water allocation plus extensive cattle infrastructure.

“Comanche is suited to both breeding and backgrounding cattle. Importantly, the property offers opportunities for productivity enhancements similar to those proven on Rewan – a central Queensland cattle property acquired by RFF in July 2016,” Rural Funds said in a statement to the ASX.

“The acquisition supports RFM’s strategy to acquire assets where productivity can be improved, with consequent increases in capital value and rental income.”

The company is well advanced in arranging a lessee for Comanche, it said.

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The acquisition price will be debt funded with the company’s bank facility providing access to $50 million in funding above the current facility limit of $275 million. Settlement is expected in July 2018.

Rural Funds is an REIT that invests in rural properties and leases them out to tenants. It has a variety of farm types in its portfolio including cattle, poultry, vineyards, cotton, almonds and macadamia. Two of its tenants includes ASX-listed Select Harvests Limited and Treasury Wine Estate Ltd.

Last October, Rural Funds Group acquired three adjoining Central Queensland cattle properties in a $72.5 million sale and leaseback deal with beef producers the Camm family.

The purchase included the Natal portfolio of properties (Natal Downs, Longton and Narellan) spanning 390,600 hectares south west of Charters Towers for a combined $53 million, with the balance provide by way of cattle and mortgage financing, farm improvements and a future performance fee. Camm will lease the properties for 10 years.

The Camm family also listed its 6,000 hectare Morocco station situated north of St George in south-central Queensland, with expectations of it fetching around $18 million.

Rural Funds Group announced in February adjusted funds from operations for the half-year of $15.4 million, up 22 per cent, and distributions of 5.02 cents per unit, up four per cent. Adjusted total assets were $687.4 million, up 17 per cent, primarily as a result of the Natal acquisitions.