ARK has purchased a 5.52 hectare parcel of land located in Kununurra, Western Australia, upon which ARK has constructed a fruit packing facility. The purchase and construction have been completed for the sum total price of $5,816,000 (Horticultural Property No.5).

ARK drew down on its debt facility with NAB in order to fund the acquisition of Horticultural Property No.5. The acquisition was made therefore with 100% debt capital.

ARK has leased out Horticultural Property No.5 for an initial term of 20 years. The starting rent is $639,760 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.

Pertinent facts relating to Horticultural Property No.5 are as follows:

• Located on Horticultural Property No.5 is a world class fruit packing facility designed to the highest specifications and includes the very latest in design and innovation in fruit packing technology.
• It is the largest and most technologically advanced fruit packing facility of its kind in Australia.
• Included is a world class fruit cooling system. This fruit cooling system facilitates the cooling of fruit as it is processed through the packing facility, under the highest possible standards of cool chain management, ensuring retention of fruit colour and flavour as well as increasing the shelf life of the fruit. Due to these factors, the owners of all fruit packed through the facility receive higher prices from the buyers of the fruit since the buyers recognise these quality factors and pay more for the fruit in question.

Location

Kununurra is the north-eastern gateway to the Kimberley region, which encompasses about 420,000 km2 of timeless landscapes and diverse land uses.

From its beginnings as a service town for workers, Kununurra has grown to a population of about 6,000 people out of a total shire population in the vicinity of 7,300.

The Kimberley region is widely acknowledged as the future fruit bowl of Northern Australia. Its rich farmlands produce many sub-tropical fruits such as bananas, paw paws, tropical citrus fruits and melons.

Horticulture Property No.5 is located on the corner of Packsaddle Road and Jabiru Road.