Supportive Conditions for Dairy Operations and Valuations

The Blade, Level 4, 12 St Marks Road, Remuera, Auckland, 1050, New Zealand | +64 9 379 6493
www.nzrlc.co.nz
NEW ZEALAND Rural Land Co
WWW.NZRLC.CO.NZ
19 May 2022
Market Update: Supportive Conditions for Dairy Operations and Valuations
The New Zealand Rural Land Company (NZX: NZL) is providing an update on operations and industry conditions ahead of its
annual results, which will be released to the market in August 2022.
Overall, conditions remain relatively buoyant in the New Zealand rural land market, underpinned by solid milk price conditions and
primary produce exports. This is despite the ongoing COVID-19 pandemic, global economic headwinds, high inflation, geopolitical
uncertainty and other factors. NZL believes its land holdings stand to benefit from an anticipated valuation uplift for dairy farms, on
the back of recent record pricing for dairy products.
In particular, NZL is confident that its recent Maniototo acquisition of $61M, announced in October 2021, was acquired attractively
to prevailing market conditions. A large scale quality dairy asset portfolio was acquired comprising of six dairy assets in Maniototo,
Central Otago totaling approximately 3,500 hectares. This land is currently held at cost on the balance sheet, but will be reviewed
as at financial year end against a new independent valuation.
Opportunities for the acquisition of rural land and a broadening of NZL’s portfolio continue to present themselves, due to restrictions
on overseas buyers, and difficulty accessing capital for many domestic buyers. Accordingly, in the near term, NZL is prioritising
opportunities in dairy, drystock and free range poultry assets.
NZL continues to be well positioned in a 30-year high inflation environment as NZL’s leases are all triple net leases; with CPI
linked rental adjustments; and historically property values tend to track well with inflation.
NZL’s annual revaluation of its land assets will take place as at 30 June 2022. The full year results will be released in August. As
detailed in the chart below, there is a particularly strong historical valuation linkage with milk price data. Recent REINZ price data
points to a continued correlation. Thus NZL anticipates the 30 June 2022 annual revaluation will support a positive uplift in Net
Asset Value (NAV).
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40.0
80.0
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160.0
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Milk PriceLand PriceLinear (Milk Price)Linear (Land Price)
NZ Dairy Land Price vs NZ Milk Price
NZ Land Price CAGR +4.65%
NZ Milk Price CAGR +4.68%
Sources: Land Prices - REINZ data, >100 hectare dairy farm prices in Otago, Southland, Canterbury and Waikato
Milk Price - Fonterra
Note: Data is three year rolling averages indexed to 100 from 2003 which is the year of the first published Fonterra Milk Price

The Blade, Level 4, 12 St Marks Road, Remuera, Auckland, 1050, New Zealand | +64 9 379 6493
www.nzrlc.co.nz
NZL expects that its 30 June 2022 revaluations will build on its record of outperforming farm price index returns for rural land. NZL’s
revaluation gains of +10.52% for the year ended 30 June 2021 were +8.45% higher than the +2.07% increase in the REINZ Dairy
Farm Index in the months from December 2020 to 30 June 2021.
Key operational initiatives as detailed in NZL’s HY22 continue to progress well.
NZL also reaffirms its full year dividend guidance of 4.16 cents per share, which equates to a net dividend yield of 3.68%, based
on the closing share price at 18 May 2022. The next dividend will be paid in September 2022.
For further information please contact:
Richard Milsom
Mobile: 021 274 2476
Email: richard@nzrlm.co.nz
Christopher Swasbrook
Mobile: 021 928 262
Email: chris@nzrlc.co.nz
or
$196.9M
$217.6M
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
Purchase PriceRevaluation
+10.52%
For the year
ended 30 June 2021
Audited accounts
for 30 June 2021