The ~$1bn real-estate property trust that owns Australian agricultural assets has been on our hit list for some time, and yesterday they announced a much-anticipated agreement to lease up to 3,000 hectares of central Queensland properties that will be used for macadamia orchards under a 40-year lease agreement with US asset management company The Rohatyn Group. The agreement is for an initial 1,200 hectares and a further 1,800 hectares of cropping and cattle land to be converted in FY24, subject to some conditions being met. The key terms of the agreement are solid and long-term in duration providing a high level of certainty to earnings for RFF which will support an unfranked yield of 4.5% in FY23 jumping to above 5% in outer years. While this would be a medium to long-term proposition, we like to buy these sorts of stocks into weakness which has been evident over the past 12 months, with the share price down 17%.
MM likes RFF as a medium/long-term investment ~$2.60
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