Rural Funds Management (RFM) is to launch an agribusiness investment that will be the first to offer investors a choice of crops to invest in.
The RFM Investment Selection trust will offer cotton, grapes and organically grown grapes as the three investment choices.
“It will operate like a master trust with a minimum investment of $20,000,” says RFM business development manager Michelle Smith.
“Investors will be able to diversify their investments to take the weather risk out of their investments.”
The traditional wine investment will be in the Barossa in South Australia and RFM has already sourced the land. The cotton investment will be in one of the traditional cotton-growing areas of New South Wales. The organic wine investment will probably be an acquisition of an existing project, Smith says.
The return on the cotton and grape projects is expected to be 15 per cent while the organic wine will return between 10-12 per cent.
The Investment Selection trust is expected to be launched in mid-July and Property Investment Research will undertake the research report.
RFM’s previous trust – the Agricultural Income Trust – has closed and is on target to give investors a 10-15 per cent capital growth this year, Smith says.
The Barossa grapes in this trust have been sold to Southcorp, one of only two contracts the company awarded for the region this year.
Meanwhile, Barossa grape project has recruited CSIRO and the Co-operative Research Centre for Viticulture to improve production yields.
The Blaxland Vineyards project, which was one of only two projects selected by van Eyk Capital in its annual report this year, is being precision-mapped for soil and contours.
According to Blaxland director Ron Collins, this will ensure the planting of vines to give maximum returns.
“This will mean we will get yields of about 80 per cent from each vine, which is up 20 per cent on previous yields,” he says.
“It will also enable us to work out what is the best position for each variety of grape, and that will give us an edge over other projects.”
The 320-hectare project at Tanunda Hill in the Barossa has an internal rate of return of 15.5 per cent.
