MyFarm launches new $9.3m Hawke’s Bay Rockit apple syndicate
Primary sector syndication company MyFarm has launched a new Hawke’s Bay-based Rockit apple syndicate, offering the potential of cash returns rising to 20 per cent per annum when the orchards reach maturity.
The New Zealand company is seeking $9.3 million in total for the syndicate, with the offer to wholesale investors 930 units priced at $10,000 each.
However, the minimum investment in the syndicate is $50,000.
The Heretaunga Orchards Limited Partnership will develop one freehold orchard of 11.5 canopy hectares in the Twyford area North of Hastings and another leased block of nine canopy hectares at Pukehamoamoa, southwest of Napier.
The freehold orchard is expected to be planted in 2021, while the leased orchard was established in 2020 for an initial term of 18 years commencing in 2019, with the option to extend for two periods of five years each.
Both orchards will grow Rockit apples, which are a rosy red, small, and sweet snack apple sold in branded tubular packaging in 28 countries world-wide. Rockit Global Limited (RGL), which owns the Rockit intellectual property, will develop the orchards and provide orchard management, postharvest, and export services.
MyFarm expects the syndicate to start generating cash returns in the 2024 financial year onwards. These are forecast to start at 2 per cent per annum on contributed capital and build through to 20 per cent per annum once the orchards are delivering mature production.
The staged nature of the development means funds will be called in at least three tranches over a three-year period. The initial investor fund call is 20 per cent on application, 55 per cent on March 1, 2021, and the remainder (25 per cent) over the following two years.
MyFarm Chief Executive Andrew Watters said: “Primary sector investments have proved resilient in the face of many Covid-19 related challenges over the past year. Meanwhile, the Heretaunga Partnership offers wholesale investors a rare opportunity to share in the international success of Rockit, a true New Zealand-bred value-add strategy.
“At MyFarm we offer a range of investment opportunities that allow investors to take a portfolio approach to investing in the primary sectors. The Heretaunga Partnership offers tax write-offs in early years and expected strong cash returns when the apple trees are at full production. This can fit well as part of an investor’s portfolio to boost average cash returns when many other asset classes are now in the low single digits."
