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Agricultural Property Asset No.28 - 82.06 Ha - Teak Property - Innisfail Queensland
ARK has purhcased 82.06 hectares of land 21 kilometres south of Innisfail in Far North Queensland for the purchase price of $800,000 (Teak Property No.17).
ARK drew down on its debt facility with NAB in order to complete the purchase of Teak Property No.17. The purchase was made therefore with 100% debt capital.
Simultaneous with its acquisition, ARK leased out Teak Property No.17 for an initial term of 20 years. ARK incurred transaction costs of approximately 4% as a result of acquiring Teak Property No.17. The rent being paid is $91,520 plus GST per annum. This equates to an income yield of 11%. The rent automatically rises each year 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.
Teak Property No.17 is comprised of 2 titles with a fence to fence area of 82.06Ha. Other pertinent points to note regarding Teak Property No.17 are:
- Teak Property No.17 is currently used as a sugar cane farm.
- Teak Property No.17 is comprised of good quality agricultural land well suited to a variety of agricultural pursuits.
- Teak Property No.17 is located in an established and well regarded sugar and banana producing locality.
- Structural improvements on Teak Property No.17 include an older style 3 bedroom residence and a new 292sqm steel framed machinery shed.
Location
Teak Property No.17 is located 21 kilometres south of Innisfail. Surrounding development is comprised of mainly sugar farms and rural residential homesites.
The nearest major service centre to Teak Property No.17 is Innisfail, which is a large coastal town situated approximately 88 kilometres south of Cairns and 260 kilometres north of Townsville.
The Johnstone Shire has a total population of approximately 18,000 persons and the town of Innisfail has a population of approximately 8,000 persons. The economy of the Johnstone Shire is based around agricultural industries including sugar cane, bananas, paw-paw, beef, tea and fishing. There is also a growing tourist industry in the area.
Suitability for Teak Production
Teak Property No.17 is ideal for the growing of Teak (Tectona grandis) trees. Teak Property No.17 is thoroughly suitable for the growing of Teak for the following reasons:
- Teak grows in areas that receive between 1000 and 4000 millimetres of annual rainfall. Teak Property No.17 has reliable annual rainfall in excess of 3200mms, and has adequate soil depth, nutrient levels, drainage and site microclimate conditions.
- Teak Property No.17 is close enough (260Kms) to a major port (i.e. Port of Townsville). Well established road and rail infrastructure exists from Teak Property No.17 to the Port of Townsville.
- Teak Property No.17 has a normal risk exposure profile to natural catastrophe after assessing key indicators, which include historical exposure of the site to fire, wind, disease or drought.
