Rural Funds strikes 40-year macadamia orchard leasing deal with Rohatyn Group

More than 2000ha of central Queensland cropping and cattle properties will be converted into macadamia orchards after ASX-listed Rural Funds struck a 40-year leasing deal.

The deal will be for an initial 1200ha, with an additional 1800ha of cropping and cattle land being developed into macadamia orchards by 2024.

More than 2000ha of central Queensland cropping and cattle properties will be converted into macadamia orchards after ASX-listed Rural Funds struck a 40-year leasing deal with a US-based international asset management company.

Rural Funds will lease 3000ha of orchards in the Maryborough, Bundaberg and Rockhampton regions.

The Rohatyn Group, in a joint venture with a global institutional investor, has secured the four-decade lease for the orchards.

The deal will be for an initial 1200ha, with an additional 1800ha of cropping and cattle land being developed into macadamia orchards by 2024.

The deal remains subject to the Foreign Investment Review Board and the orchard development will be subject to Rockhampton’s water supply system being completed.

Orchard development and management services will be provided by Rural Funds.

The lease will have annual indexation between 1.5 and 2.5 per cent, with profit share above certain thresholds.

Upon the commencement of the initial lease, a $40m loan will be provided to Rural Funds. An additional $60m will be provided during the development, to be repaid over seven years.

There are several lessee termination rights, including if the orchards fail to produce a 3.6 tonnes per hectare mature yield over a rolling five-year period.