INVESTMENT RATIONALE

The globe’s growing hunger for the products of arable land is set in stark contrast to increasingly restricted supplies of land and water. Greenfield sees an extremely attractive risk-reward profile for investment in long-term assets exposed to primary production and processing of the products of arable land.

Key factors driving global demand for products of agricultural land:

• population growth
• increasing population wealth in developing countries
• increasing non-food demand

Key factors restricting global supply of land:

• erosion, urbanisation, desertification
• decreasing new land availability

The production of agricultural based products is New Zealand’s largest export industry and a central part of New Zealand’s economy. In the year to 31 December 2009 New Zealand exports of milk and meat products were NZ$13.2 billion and comprised 33.5% of total exports.

New Zealand is fortunate to have an even temperate climate and relatively abundant water supply along with a well developed infrastructure and mature agriculture industry which underwrite its low cost agricultural production systems. As such NZ offers land-based agricultural investors a lower risk profile than the majority of its international competitors.

NZ INVESTMENT RETURNS

Compared with investment in global equities and commercial property, NZ agriculture investment has a history of producing higher returns with lower volatility. As such there is a strong investment case for long-term NZ pastoral assets generating attractive risk adjusted returns.

Under Greenfield’s operating model, managed agricultural land investments can be expected to generate total returns of 15% - 25% over a 10 year holding period and annual cash yields of 5% - 10%.