Property

Hewitt Cattle to put 539ha solar farm rental income on the market

Beef Central, 28/06/2022

Hewitt Cattle Australia has put the rental income for one of Australia’s largest solar farms on the market. Photo: LAWD

HEWITT Cattle has put the rental income of one of Australia’s largest solar power generation plants on the market – which currently collects more than $580,000 in rent.

Located at Darlington Point, 140km from Wagga Wagga, the 539ha solar farm has direct connection the power grid. The triple net lease is currently $582,209 (plus GST), and is subject to an annual CPI review, ensuring real returns are protected in the current high-inflation environment.

The solar farm is situated within the 14,875ha Tubbo Station, which was sold to Hewitt Cattle in 2021 and is operated as a large-scale grazing enterprise. The solar farm is a completely different operation to the cattle company, with Hewitt acting as the landlord.

Hewitt Cattle Australia agribusiness chief executive Ben Hewitt said the sale of the rental income from Darlington Point Solar Farm would allow the company to re-invest the capital to drive productive outcomes for its sheep division.

“We purchased Tubbo Station as a single asset, including the solar farm, to help secure the grazing property and to streamline the process for the vendor,” Mr Hewitt said.

“Since buying the property, we have reviewed our operations and identified the solar farm lease wasn’t part of our core business. We have made the decision to sell these rights, and to reinvest the capital back into our key operations.”

The solar farm has been listed by Land, Agribusiness, Water and Development (LAWD) senior director Col Medway who said it was attractive for agribusiness or institutional investors. He said the 35-year lease with 31 years remaining, plus three five-year options, was a valuable opening for interested parties to secure a stable income stream from the rapidly expanding renewable energy sector.

“Renewable energy assets are offering a solution to Australia’s current energy crisis and have strong growth prospects for the future,” Mr Medway said.

“It is particularly attractive, as the infrastructure has direct connection to the grid – a critical aspect that many other solar operations are unable to offer. The arrangement is also protected from high inflation with an annual CPI review built into the agreement.

“Last year during the sale of Tubbo Station, we received great interest in the solar component of the operation, from both graziers and institutional investors. Graziers were attracted to the low risk, substantial annuity and viewed the investment as a hedge against climate and commodity price instability, while institutional investors liked the premium above their cost of capital.

“Following the economic and energy situation that has emerged over the past few months, we expect this demand to have only strengthened.”

The solar ground lease is currently under contract until 2053 and is being sold through Expressions of Interest.

Source: LAWD

 

 

 

 

 

 

 

 

 

 

 

 

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