MAI New Zealand Buy & Lease Fund Completes Investment in KMMAH in New Zealand

August 27, 2020

BY Milltrust International Group

On 1st June 2020 the MAI New Zealand Buy & Lease Fund completed an investment for a 25% shareholding in newly established entity, Kai Mana Milltrust Agricultural Holdings (KMMAH). The investment initially provides exposure to 1,027 hectares of farmland in the North and South Islands encompassing beef and lamb finishing farms and a dairy operation (North Island) focused on supporting the beef breeding program using embryo transplanting techniques. The first property in the South Island (Wharton’s block, 156 Ha) as well as North Island farms Oruanui & Pengur Farms (350 Ha) have been acquired and a further 2 South Island farms (Meikel and Nelson farms, 369 and 152 Ha respectively) are under contract and will be acquired in Q3.

The KMMAH investment provides exposure to free-range grass-fed beef and sheep production systems and an integrated breeding operation from the dairy platform. The farms have been selected for their strong soils and history of highly productive livestock production. In the South Island (North Otago) the North Otago Irrigation Company (NOIC) water is future-proofed with share allocations available providing consistent water supply. Favourable supply contracts with Alliance Group (abattoir) with premiums for Wagyu cattle and lambs are in place. The North Island farms will integrate well with the North Otago hub reducing operating risks with geographical, environmental and seasonal diversification. The 800 cow dairy herd provides access to cows for an Embryo breeding program, ensuring supply of donor cows plus the benefit of income from milk. The breeding program will utilise embryo transplants, yielding stud bulls for sale and lease and incorporate a calf rearing enterprise to raise replacements to develop integrated supply chain and higher margins. The North Island farms come with surplus water rights that can be transferred and used for subsequent acquisitions. Soils are free draining, strong and healthy, great for cattle growth and production.