Rural Funds Group among buyers of A$100m THF portfolio

Rural Funds Group purchased The Pocket, which alongside another central Queensland acquisition, adds more than 20,000ML of water entitlements to its portfolio.

A portfolio of five properties in central Queensland, owned by a European family office, has sold for a combined total of approximately A$100 million ($74 million; €64 million), with a different local buyer for each of the five assets.

The family office held the assets in Australia under a company called THF Finance. It purchased them in 2010 for around A$35 million and listed them for sale in August 2021.

The portfolio properties are located to the west and south-west of Rockhampton in central Queensland. The 1,917ha property known as The Pocket includes 5,364ML of water; the 3,859ha Mostowie includes 400ML of water; and the 3,168ha Bindaree includes 850ML of water. The other assets are the 3,744ha Karamea and the 9,212ha Lucie Station.

THF has been operating the portfolio as a beef cattle enterprise, with more than 650ha of center pivot irrigation supporting fodder production including Leucaena and hay.

All five properties are now under contract to separate buyers, characterized as local Australian family and corporate buyers by Oxley Capital Partners, which is managing the sale process.

Oxley Capital Partners said the spread of buyers “demonstrated the quality of the […] assets and the depth of the domestic market.” None of the individual purchase values have been disclosed, other than that of The Pocket.

Among the buyers is Australian Securities Exchange-listed asset manager Rural Funds Group, which has purchased The Pocket. The firm’s responsible entity, Rural Funds Management, announced the purchase to shareholders this week alongside several other acquisitions, including a 4,130ha cropping property in central Queensland called Baamba Plains.

RFM will pay A$13.8 million for The Pocket and A$32 million for Baamba Plains, with settlement expected to occur this month. The properties come with a combined 20,733ML of water entitlements, which RFM said are currently underused.

“RFM plans to utilize surplus water entitlements to improve the productivity of the properties. Productivity developments include expanding irrigated cropping areas and increasing cattle carrying capacity through pasture improvements. These developments are consistent with those successfully implemented on other nearby natural resource assets owned by RFF,” the firm said in a statement.

In addition, RFM announced the purchase of two macadamia orchards in Queensland, covering a combined 475ha, for a total amount of up to A$63.1 million, including shares in processing and marketing company Marquis Macadamias. The orchards are mature, with potential for improved yields and expansion of planted areas, RFM said, with settlement expected to occur in December.

The acquisitions will be funded from an increase to RFF’s debt facility. The firm revised its FY22 forecast adjusted funds from operations upwards to 11.8 cents per unit.