Orchard Primary Infrastructure Fund

16 February 2009

Orchard Funds Management (Orchard) today confirmed four agricultural assets have been put on the market, as part of its debt reduction strategy for the Orchard Primary Infrastructure Fund (the Fund).

The fully leased properties identified for sale are Qualco (West) Vineyard in South Australia; a purpose-built poultry farm in Tamworth, New South Wales; and two almond plantations – Lake Powell Almonds and Lake Carpul, both located in Lake Powell, Victoria.

The Fund is taking advantage of the relatively resilient market for agricultural assets as part of an overall debt reduction strategy.

Commenting on the pending sales, Orchard CEO David Hinde said “Despite a challenging economic backdrop, valuations for primary infrastructure assets have remained fairly stable to date. In the current environment we have decided to capitalise on these conditions, while at the same time reducing the Fund’s debt level”.

Orchard embarked on a debt reduction programme across its funds last year and is continuing with this focus in 2009.

The Orchard Primary Infrastructure Fund leases land and key production assets to quality agribusiness operators on a long-term basis. The Fund has exposure to 19 properties and assets under management of over $125 million, with a weighted average lease expiry of 13.5 years1.

All four assets offer long-term leases, quality tenants and high yields. Qualco West Vineyard is a large holding of 508 hectares, with 418 hectares of established vineyard. It was acquired by the Fund in 2004 and leased to a publicly listed wine company on an initial 12 year lease.

The purpose-built poultry farm in Tamworth comprises 20 poultry production facilities and is currently leased for 14 years to an established producer, operating in a rapidly growing industry.

Lot 2 at Lake Powell consists of 220 hectares which is a freehold portion of an 1846 hectare almond development which is leased to a publicly listed company and acquired by the Fund in June 2004.

Lots 5 and 6 at Lake Carpul are leased to the same listed company and were acquired by the Fund in June 2007. The holding totals approximately 497.7 hectares, of which 405 hectares has been planted to almonds.

The Qualco West Vineyard and Lake Powell assets have substantial permanent water rights.

The marketing campaign for all assets is being managed by Colliers.

1All figures as at 30 September 2008.

Click here to download a copy of the media release.