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Agricultural Property Asset No.3 – 1172Ha – Sandalwood Property – Pingelly Western Australia
ARK has purchased 1172 hectares of land 30 kilometres south-east of Pingelly in Western Australia for the purchase price of $2,027,900 (Sandalwood Property). Please click here to view Regional Location Map.
ARK drew down on its debt facility with NAB in order to complete the purchase of the Sandalwood Property. The purchase was made therefore with 100% debt capital.
ARK has leased out the Sandalwood Property for an initial term of 20 years. The starting rent is $202,790 plus GST. This equates to an income yield of 10%. The rent to be earned by ARK automatically rises by 2.8% per year during this 20 year lease period.
The Sandalwood Property is comprised of 8 contiguous lots on 7 certificates of title and has a fence to fence area of 1172Ha. Prior to making an offer for the Sandalwood Property, ARK received a sworn valuation in respect of the Sandalwood Property which swore that the value of the Sandalwood Property was $2,027,900.
The sworn valuation of the Sandalwood Property also makes the following important points:
- The Sandalwood Property currently is a mixed farming property suitable for various crops (wheat, lupins, barley, canola and/or oats) and grazing purposes (i.e. sheep).
- The Sandalwood Property has been well cleared and developed.
- The Sandalwood Property is comprised of good soil types with minimal areas of saline-affected soils.
- The Sandalwood Property is regarded as being well watered with a watering point to all paddocks and has generally been self-sufficient with respect to water during extended dry periods.
- The Sandalwood Property is located south-east of Pingelly and due diligence enquiries indicate that the rainfall (approximately 400mms per year) and productivity in this particular locality is generally very reliable.
- The Sandalwood Property has upon it no buildings or other improvements of any value.
- Land in the area in which the Sandalwood Property is located has been tightly held for many years.
- There appears to be an emerging trend in the vicinity of the Sandalwood Property where larger holdings are being split up and sold as lifestyle holdings.
Suitability for Sandalwood Production
The Sandalwood Property is ideal for the growing of Sandalwood (Santalum spicatum) trees. Sandalwood (Santalum spicatum) is native to Western Australia and is native to the area in which the Sandalwood Property is located.
The Sandalwood Property is thoroughly suitable for the growing of Sandalwood for the following reasons:
- Sandalwood grows in areas that receive between 200 to 600 millimetres of annual rainfall. The rainfall at any plantation site should average more than 400 millimetres a year. The Sandalwood Property has reliable annual rainfall in excess of 400mms, and has adequate soil depth, nutrient levels, drainage and site microclimate conditions.
- The Sandalwood Property is close enough (190Kms) to a major port (i.e. Port of Fremantle). Well established road and rail infrastructure exists from the Sandalwood Property to the Port of Fremantle.
- The Sandalwood Property 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).
