Has anyone read the IM from the NZ Rural Land Co? Slated to list mid next year...


Essentially a property speculation play on the price of dairy land, it 'should' just trade at NTA but who knows these days...

Does none of the operation by itself, just owns the land and generates lease income.... 0.5% management fee, 10% growth performance fee, claiming ~3.5% pre tax divvy.

Interested in how it goes but a few things which flag to me....

0.25% of asset value dedicated to maintainence to me seems low, their terms throw alot of it onto the leasee but this looks light.

They put little weight on environmental regulation risk

Lease terms are 10 years, assets are valued annually. Seems like incentive to inflate the asset value (which has null immediate effect on income), lul the shareholders into feeling smart and strip the cash from it.

They've kinda got a circular argument going on.... land values are subdued because few able to buy, but then spec on value rise, who can they liquidate the assets to?

But I am feeling cynical at the moment so happy to be proven wrong...