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Agricultural Property Asset No.4 – 68Ha – Teak Property – Innisfail Queensland
ARK has purchased 68.84 hectares of land 16 kilometres south-west of Innisfail in Far North Queensland for the purchase price of $580,000 (Teak Property). Please click here to view a Regional Location Map.
ARK drew down on its debt facility with NAB in order to complete the purchase of the Teak Property. The purchase was made therefore with 100% debt capital.
Simultaneous with its acquisition, ARK leased out the Teak Property for an initial term of 20 years. The starting rent is $58,000 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 Teak Property is comprised of 2 adjoining lots with each lot the subject of a single certificate of title and has a fence to fence area of 68.84Ha. Prior to making an offer for the Teak Property, ARK received a sworn valuation in respect of the Teak Property.
The sworn valuation of the Teak Property made the following important points:
- The Teak Property currently is used as a sugar cane farm.
- The Teak Property is comprised of good quality agricultural land well suited to a variety of agricultural pursuits.
- The Teak Property is located in an established and well regarded sugar and banana producing locality.
- The Teak Property is fully developed.
- Structural improvements on the Teak Property include a 5 bay older style machinery shed of 200sqm. There is also a bore equipped with a pump and motor.
- The purchase price of $580,000 is inclusive of land, the machinery shed, one tractor, cane stools and sugar cane crop.
The Teak Property is located 16Km south-west of Innisfail and 7Km south-west of the small town of South Johnstone. Surrounding development is comprised of mainly sugar farms and rural residential homesites.
Suitability for Teak Production
The Teak Property is ideal for the growing of Teak (Tectona grandis) trees. The Teak Property 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. The Teak Property has reliable annual rainfall in excess of 3000mms, and has adequate soil depth, nutrient levels, drainage and site microclimate conditions.
- The Teak Property is close enough (260Kms) to a major port (i.e. Port of Townsville). Well established road and rail infrastructure exists from the Teak Property to the Port of Townsville.
- The Teak 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).
