Rural Funds Group has swooped on three adjoining cattle properties in the Charters Towers region, acquiring them in a $72.5 million sale-and-leaseback deal with well-known beef producers the Camm family.
Under the deal with Camm Agricultural Group, Rural Funds Group will pay $53 million including stamp duty for the Natal portfolio of properties (comprising Natal Downs, Longton and Narellan) spanning 390,600 hectares south west of Charters Towers.
The trust will provide CAG with a further $15 million in cattle and mortgage financing, $2.5 million to invest in farm improvements as well as a $2 million performance fee if certain "development points" are achieved by the end of next year. In return, Camm will lease the properties for 10 years from the trust.
Camm Agricultural Group is headed by David Camm who lost his wife Judy, aged 70, in May this year.
David and Judy lived on Natal Downs while their son, Bryce, operates the family’s Wonga Plains Feedlot, at Bowenville.
Queensland Country Life has contacted the Camm family for comment.
Rural Funds managing director David Bryant flagged the acquisition of a "Queensland cattle property" as part of its 2017 full-year results, where the country's largest diversified agribusiness trust reported a 78 per cent rise in adjusted earnings.
“We feel there is a comparative advantage in cattle production [in Australia] … with increasing demand coming from the middle classes of Asia," Mr Bryant told Fairfax Media.
"This acquisition also increases the climatic diversification of the fund and has a lot of development potential," he added.
The deal – one of the largest yet negotiated by Rural Funds Group – grows that value of its diversified portfolio to $660 million, including six cattle properties worth $101 million that will make up 16 per cent of the portfolio.
The acquisition is expected to increase FY18 adjusted funds from operations to 12.7 cents per unit from 12.5 cents per unit. The total forecast distributions remain unchanged at 10.03 cents per unit.
Rural Funds Group's investments in cattle and cotton follows a decrease in demand for almond plantings (which still account for almost half of its portfolio by value) after California, the world's biggest almond growing region, lifted production following many years of drought.
In 2017, it acquired three Queensland cattle properties for $52.5 million and the 4880-hectare cotton property Lynora Downs in central Queensland for $26.6 million.
Rural Funds Group is also invested in vineyards leased to Treasury Wine Estates, poultry farms and macadamia orchards.
This article first appeared on The Financial Review
