)
Rural Funds Group (ASX: RFF) has exchanged contracts on the sale of four cattle properties and a water entitlement for a combined $255.6 million, representing an average 22.7 per cent premium to their December 2025 book values as the agricultural REIT moves to bring its gearing back within target range.
The portfolio comprises Queensland's Rewan Station at $106.9 million, Victoria's Cobungra Station at $50.3 million, Queensland's Wyseby at $43.2 million, Queensland's Cerberus at $34.1 million, and a 2,500-megalitre NSW river water entitlement at $21.1 million.
While Rural Funds Group has not disclosed the buyers of the assets, acclaimed Australian cattle breeder Will Caldwell and his family, understood to be backed by an investment group, are reported as the buyers of neighbouring central Queensland properties Rewan and Wyseby in a deal worth more than $150 million.
Acton Cattle Co, which currently leases Cerberus, is understood to have secured that property.
Cobungra Station in Victoria's high country is reported to have sold to a foreign investor with plans to transition the property from grazing into forestry.
The Cobungra sale is subject to Foreign Investment Review Board approval, while all other transactions are unconditional.
The assets had a combined prior book value of $208.3 million, well below the sale prices achieved .
Settlements are expected predominantly in the first half of FY27, with proceeds to be used initially to pay down the group's core debt facility.
The sales form a central plank of fund manager Rural Funds Management's strategy to reduce gearing from a pro forma 39.1 per cent as at the end of December last year to within RFF's target band of 30 to 35 per cent.
On a pro forma basis, gearing is expected to drop to 31.6 per cent once proceeds are applied.
The transactions also satisfy a condition precedent that enables Rural Funds Group to increase the J&F Australia guarantee from $160 million to $200 million when required by beef processor JBS, a key tenant across the group's cattle portfolio.
Rural Funds Group reaffirmed its FY26 adjusted funds from operations forecast of 11.7 cents per unit following the contracted sales.
The divestment program marks a significant reshaping of Rural Funds Group's agricultural portfolio, which spans cattle, macadamias, almonds, vineyards and cropping land across eastern Australia.
The group has faced investor scrutiny over elevated gearing levels in recent periods, and the 22.7 per cent premium achieved across the five assets provides a benchmark for how institutional agricultural land values are tracking against book.
Rural Funds Group revealed in February with the release of its FY26 interim results that it achieved total divestments of $60.7 million for the period with the sale prices achieved at or above book value.
)
