Plans to remediate the 8900-hectare Linkletters estate in Esperance in the Western Australian wheatbelt, valued at $17.65 million, have been put on hold by its owners and managers as they consider ways to extract value from its vast bluegum plantations. Source: The Australian Financial Review
“There has been an increase in the value of the timber by about 15% with the impact of the lower dollar beneficial,” said Justin Epstein, chairman of One Managed Investment Funds, the trust’s responsible entity.
Linkletters is the sole remaining asset of the ASX-listed Agricultural Land Trust that was once owned by Elders and which is named after US television host Art Linkletter, who developed it in the 1950s.
Western Australian landholder Allen Caratti is the controlling shareholder, owning 61% of Linkletters, after striking a deal to acquire the property from Elders in 2013.
Linkletters has 7476 hectares of bluegum plantations, which were planted nine years ago when the trust was a major player in the forestry-managed investment schemes.
This was before the dramatic collapse of operators such as Great Southern and Timbercorp around the time of the global financial crisis, after which forestry values plummeted.
Original plans for Linkletters, laid out in August, were to remove the bluegum plantations by about March next year and return the property to cropping and grazing, a move that would boost its value to around $28 million to $29 million, and entice a sale or lease agreement.
In its annual results, Mr Epstein wrote that “no significant progress had been made towards remediation … as a result of negotiation with a number of parties to implement an alternative proposal to extract value for investors from the remediation process”.
An independent valuation by the Opteon Property Group valued the bluegum plantations at $2000 a hectare, with 555 hectares of cleared or pastured land valued at $3100 a hectare.
The trust earned no rental income during the year and will not pay a 2015 distribution. The trust’s syndicated loan facility expires in July next year.
