RFF’s cattle assets are leased to Cattle JV Pty Ltd (CJV)
A property lease sets out the contractual lease terms between RFF and CJV for the Mutton Hole, Oakland Park and Rewan Station properties. The breeding herd owned by RFF is leased to CJV under a separate herd lease.
|Lessee||Lease type||Payment frequency||Rent review||Capital commitments|
|Cattle JV Pty Ltd||Property||Quarterly in advance||Annual CPI & cattle price adjustment (Eastern Young Cattle Index), with 150bps ceiling||Five year market review||– R&M on account of lessee
– Capital expenditure on account of lessor
|Cattle JV Pty Ltd||Herd lease||Quarterly in advance||Annual cattle price adjustment mechanism||n/a||– Herd maintenance on account of lessee|
Cattle JV Pty Ltd
CJV is a wholly owned subsidiary of Rural Funds Management and is structured to accept investment with suitable joint venture partners (e.g. processors seeking to secure supply).
CJV has employed property managers for each of the three properties with 80 years’ combined experience in livestock operations and management. The personnel have worked on the properties being purchased or within the immediate region.
CJV aims to increase the carrying capacity, weight gain and calving rates on the three properties. The herd lease rental indexation includes an Eastern Young Cattle Index (EYCI) adjustment mechanism (up to an additional 150 basis points above a base rate) providing RFF with some exposure to the benefits of higher cattle prices.