South Perth-based agricultural investment company the ARK Fund Ltd has purchased a 41 hectare sugar cane farm west in Far North Queensland for $390,000, with plans to develop the property into a Teak plantation.
South Perth-based agricultural investment company the ARK Fund Ltd has purchased a 41 hectare sugar cane farm west in Far North Queensland for $390,000, with plans to develop the property into a Teak plantation.
The full text of a company announcement is pasted below
The Board of the ARK Fund Limited (ARK) is pleased to announce the purchase by ARK of 41.09 hectares of land 8 kilometres west of Innisfail in Far North Queensland for the purchase price of $390,000 (Teak Property No.4).
ARK drew down on its debt facility with NAB in order to complete the purchase of Teak Property No.4. The purchase was made therefore with 100% debt capital. The cost of the debt capital is 7.37%.
Simultaneous with its acquisition, ARK has leased out Teak Property No.4 for an initial term of 20 years. The starting rent is $39,000 plus GST per annum. 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.
- Teak Property No.4 is comprised of a single lot with a fence to fence area of 41.09Ha. Other pertinent points to note regarding Teak Property No.4 are:
- Teak Property No.4 is currently used as a sugar cane farm.
- Teak Property No.4 is comprised of good quality agricultural land well suited to a variety of agricultural pursuits.
- Teak Property No.4 is located in an established and well regarded sugar and banana producing locality.
Location
Teak Property No.4 is located 8Km west of Innisfail. Surrounding development is comprised of mainly sugar farms and rural residential homesites.
The nearest major service centre to Teak Property No.4 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.4 is ideal for the growing of Teak (Tectona grandis) trees. Teak Property No.4 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.4 has reliable annual rainfall in excess of 3000mms, and has adequate soil depth, nutrient levels, drainage and site
microclimate conditions.
Teak Property No.4 is close enough (260Kms) to a major port (i.e. Port of Townsville). Well established road and rail infrastructure exists from Teak Property No.4 to the Port of Townsville.
Teak Property No.4 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).
Rewards Group Teak Project Financial Year Ending on 30 June 2007
Rewards Group Limited s Teak Project closed fully subscribed on 30 June 2007 after raising $20,103,600 (inc. GST) from 608 growers. ARK has leased out Teak Property No.4 for an initial term of 20 years to the Responsible Entity of Rewards Group s Teak Project. The starting rent is $39,000 plus GST per annum. 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.
Further Acquisitions of Land in and around the Innisfail Region in Far North Queensland
ARK is greatly interested in acquiring further land in and around the Innisfail region that has reliable rainfall of more than 1500mm per year and which is suitable for Teak (Tectona grandis) forestry. The details of such acquisitions will be made public as and when such transactions occur.
