INVESTORS are being sought for $250 million to be spent on buying 25 dairy properties in south-east Australia.
Kestral Capital, an investment company, will be combining with Dairy Farm Investments (DFI), as managers of the fund, which is provisionally known as DFI Farmbank Trust, to raise the capital and buy the properties.
The farms will be selected on yield and potential for improvement, and then leased to a subsidiary of APA Financial Services to manage, reports The Australian Financial Review.
The fund will have different rates of return, depending on whether investors choose to invest in the property or operating division.
Niall Cairns, managing director of Kestral Capital, said: "There are great opportunities for improving returns on Australian farms through more investment in agricultural business and agricultural technology."
Mr Cairns said technology improvements on dairy farms in New Zealand during the past decade had nearly doubled annual revenues to about $20 billion, compared to Australia where they had remained static.
Kestral proposes to set up and find investors for the investment trust to acquire the land, buildings and other assets of the farms.
The company will hold legal title to all assets but could consider traditional owners staying on to manage their former properties, Mr Cairns said. "We will be assessing the situation on a case-by-case basis," he said.
Mr Cairns said early reaction from a range of domestic and international institutional and wholesale investors had been strong.
The initial investment would be in about 10 farms and would gradually increase to 25, depending on market conditions. Productivity and profits will be boosted by aggregating output to maximise prices to processors, reducing costs by sharing farm management and combined purchasing power, and improving output by using latest technologies and breeding techniques, according to Mr Cairns.
A statement from APA said the right mix of strategies could boost net profit margins by about 40 per cent over five years.
A prospectus is expected next month and the public offer would likely close in August.
Kestral investments include global dairy technology supplier Tru-Test Corporation. It has invested more than $250 million in Australian and New Zealand companies.
The federal government has been calling on farmers and industry to get ready for the "dining boom" to boost agricultural exports and turn the nation's rural sector into an export-leading food bowl for Asian markets.
Original Article Here
No comments:
Post a Comment