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Agricultural Property Asset No.17 - 141.2 Ha - Mango Property - Mareeba Queensland
ARK has purchased a 141.2 hectare mango farm situated 35 kilometres west of Mareeba in Far North Queensland for the purchase price of $2,050,000 (Horticultural Property No.4).
ARK drew down on its debt facility with NAB in order to complete the purchase of Horticultural Property No.4. The purchase was made therefore with 100% debt capital.
Simultaneous with its acquisition, ARK has leased out Horticultural Property No.4 for an initial term of 20 years. ARK expects to incur transaction costs of approximately 4% as a result of acquiring Horticultural Property No.4. The starting rent therefore is $234,520 plus GST per annum. This equates to an income yield of 11%. The rent to be earned by ARK automatically rises by the greater of 2.8% or the consumer price index (CPI) for the 12 month period that has just passed. This rent increase occurs each year during this 20 year lease period.
Horticultural Property No.4 comprises a single surveyed lot with a fence to fence area of 141.2Ha. Horticultural Property No.4 has been extensively developed as a mango farm with approximately 6,060 mango trees all of which are in full production. Horticultural Property No.4 has a large area of open pasture country (approximately 30Ha) which is currently not utilised and which has the potential for further horticultural development.
The main improvement to Horticultural Property No.4 is a substantial industrial quality fruit packing shed with associated packing plant and coldrooms. The packing shed has the capacity to pack over 4,000 mango trays per day and it currently packs its own farm produce as well as outside produce on a contract basis. Other structural improvements include a single basic machinery shed and a small two bedroom masonry block cottage. Horticultural Property No.4 has an irrigation water allocation of 372 megalitres which is considered more than adequate.
Prior to making an offer for Horticultural Property No.4, ARK received a sworn valuation in respect of Horticultural Property No.4. The sworn valuation valued Horticultural Property No.4 at $2,050,000.
The sworn valuation of Horticultural Property No.4 also made the following important points:
- The highest and best use for Horticultural Property No.4 is its current use for horticulture.
- Horticultural Property No.4 presents well and has been well developed.
- There is substantial scope to further develop other horticulture on Horticultural Property No.4 given the available vacant land and existing water allocations.
Location
Horticulture Property No.4 is located within the Mutchilba district and is located 35 kilometres by road to the west of the regional township of Mareeba, Queensland and 95Km west of Cairns. Surrounding development is of other agricultural and horticultural farms with the Mutchilba district being an established fruit producing area.
