Rural Funds Management Limited (RFM), as the responsible entity of the Rural Funds Group (ASX: RFF), completed the lease and co-investment of two high-quality cropping properties in FY25 with a global institutional investor.
The transaction, initially announced in June 2024, consists of a 10-year triple-net lease and a 50% interest in the properties.
The properties, Mayneland (2,942 ha) and Baamba Plains (4,130 ha), acquired in 2018 and 2021 respectively, are located near Rolleston in central Queensland, an area targeted by RFM for high-yield potential and asset pricing dislocation.
Partnership with TRG and a global institutional investor
The lease and co-investment of the properties is with a joint venture managed by The Rohatyn Group (TRG) on behalf of TRG and a global institutional investor.
TRG is a New York-based global asset manager with expertise in agriculture, forestry and emerging markets. TRG has invested in Australian agriculture as part of its focus on acquiring farmland at attractive valuations where productivity can be improved through capital investments, optimization of on‑farm activities and achieving scale.
Transaction structure
The lease aligns with existing portfolio cropping lease rates and incorporates annual indexation with an incentivisation mechanism. The lessee’s return is comprised of income from farming operations and capital growth from development gains and land value appreciation, as a co-owner of the properties.
RFM provides expertise and farm management services, providing further alignment within the transaction structure.
Productivity developments
Since acquisition, RFM has managed significant RFF investments in both properties to boost productivity via additional irrigated cropping capacity. At Baamba Plains, developments expanded irrigation from two to five large-scale lateral irrigators covering over 900 ha, consolidating fields up to one km wide by two km long. Additionally, new water storages were constructed by moving 2.8 million cubic metres of soil into eight-metre-high walls for enhanced security and reduced evaporation.
At Mayneland, an additional 4,940 ML water storage was constructed, three centre pivot irrigators were upgraded and an additional seven installed, increasing the irrigated area from 485 ha to approximately 1,000 ha.
These enhancements increased annual planted areas and operational scale ahead of leasing.
Development maps
Development summary
Implementation and outcomes
The structure illustrates RFM's implementation of RFF's strategy: acquiring underutilised farms, executing targeted developments like water storage and irrigation cropping area expansion, and partnering with high-quality investors.
For wholesale investors, participation in lease and co-investment arrangements offers alignment, exposure to developed assets, and partnership with experienced RFM management.
