Valuation Report
Lawsons Vineyard Riddoch Highway Padthaway, SA
Regenal Investments Pty Limited
31 December 2010 Ref: VADEL3637
Lawsons Vineyard, Riddoch Highway, Padthaway, SA Executive Summary (continued)
Valuation Details
Instructing Party Reliant Parties Regenal Investments Pty Limited as Nominee of CK Life Sciences Int’l Inc Bonita Ho Planning and Investment Manager Registered Proprietor Challenger Listed Investments Limited
CK Life Sciences Int'l Inc Purpose of Report Major Transaction Purposes 2 Dai Fu Street Interest Valued Freehold fee simple on both a vacant possession and an Tai Po Industrial Estate encumbered basis (subject to the existing lease).
New Territories, Hong Kong Date of Valuation In accordance with your written instructions dated 2 December 2010, our inspection of the subject property as at 26 October 2010 and the requested date of valuation as at 31 December 2010, we confirm that this valuation certificate has been provided as at 31 December 2010 (Date of Valuation). We have assumed that there will be no change to the property or the market between the date of issue and the date of valuation. Should we become aware of any relevant market information that may impact on the value of the property, up to and including 31 December 2010, we at our own discretion reserve the right to review and possibly amend the valuation analysis contained herein.
Property Overview
Brief Description
The subject property comprises a total area of approximately 205.45 hectares of which approximately 168.22 hectares has been developed to irrigated vines in the period from 1968 through to 2005. The property is located within the Padthaway area of the Limestone Coast Geographic Indication and appears to have been developed to a high standard. Secondary improvements on the property include a residential dwelling together with associated shedding improvements in addition to vineyard and chemical shedding improvements. The property is held in three certificates of title and is currently leased to Pernod Ricard Pacific Pty Ltd for a period of 7 years commencing on 1 July 2006 and expiring on 30 June 2013 together with three rights of renewal of four years each.
Total Area 205.45 hectares approx.
Vineyard Area 168.22 hectares approx.
Water Allocation 339.51 mega litres
Local Government Area Tatiara District Council
Zoning Primary Industry
Lawsons Vineyard, Riddoch Highway, Padthaway, SA Executive Summary (continued)
Major Issues
• The events of early 2008 including the initial sub-prime fallout in the United States and subsequent Global Financial Crisis (GFC) created uncertain times for both the equities and property markets in Australia which impacted to varying degrees upon a variety of market participants. The initial impact was focussed on the Listed Property Trust sector operating assets within the major commercial, industrial, retail and infrastructure sectors. While a degree of uncertainty still remains within these markets, the magnitude is notably less than that evident throughout 2008 and the majority of 2009. Improving levels of general market activity over recent times appears to have resulted in growing investor confidence, albeit shallower than that experienced prior to the GFC. The rural property market has typically lagged the experiences of the other major markets and traditionally has not displayed their volatility. However there have been some very substantial collapses within the managed investment scheme sector in particular that have dampened investor confidence. The very rapid tightening of credit availability that resulted from the GFC remains an issue within the Australian rural property market with LVR requirements causing a general pull back in many regional markets.
• In light of the improving levels of market activity evidenced in CBD and major regional real estate sales and leasing markets over more recent times, we note that investment returns for good quality assets with secure cash flows in many instances appear to have stabilised, and in some instances are showing signs of tightening. However, in contrast to this observation we note poorer quality assets and particularly those with considerable existing vacancy and / or short term major tenant expiry continue to be priced by the shallower market on an opportunistic basis, and thereby remain at risk of a prolonged period of softer yields. The same can be said for rural property markets where although transactions are rarely measured or negotiated on a yield basis, quality land types have retained more demand and hence tended to hold values ahead of less productive, secondary land types.
• We have been provided with planting details that show the property has been developed to 168.22 hectares of irrigated vines. • At the present time there are an abundance of vineyards being offered to the market throughout most cool climate regions including Padthaway and the greater Limestone Coast Geographic Indication (GI).
• Water for vineyard irrigation purposes is sourced under licence number 7038 allowing the proprietor to take a total of 339.51mega-litres of permanent underground water for vineyard irrigation purposes from the Padthaway Prescribed Wells Area.
• In addition to the above 33.95 mega-litres of bridging water is available on a temporary basis until 30 June 2011. • The property is currently leased to Pernod Ricard Pacific Pty Ltd for a term of 7 years commencing 1 July 2006 and expiring 30 June 2013. • The current annualised rental as advised by Challenger Wine Trust is $1,774,859 per annum excluding GST. • Rent reviews are performed annually and the rent is increased by 1.5% in July 2007, 2008 and 2009 with 0.75% increases in 2010, 2011 and 2012 as at the date of the lease anniversary.
• The rentals are paid monthly in advance in twelve equal instalments. • In preparing this valuation, we have also calculated a vacant possession value (unencumbered value of the property ignoring the current lease) and in this instance we have assumed that the fruit produced on the property will be saleable under contract at district average prices.
• The Padthaway GI has a preponderance of corporate owned, large vineyards. The assets of both Fosters Wine Estates and Constellation Wines have been placed on the market in recent times, and sold at greatly discounted prices. We are of the opinion that at the present time there is a very thin market for properties of this nature, with deep discounting necessary to achieve a timely sale.
• There are an abundance of viticultural properties currently on the market throughout the Limestone Coast region.
Lawsons Vineyard, Riddoch Highway, Padthaway, SA Executive Summary (continued)
Key Assumptions
• This valuation is made on the assumption that there are no actual or potential contamination issues.
• For 10 year discounted cash flow purposes we have assumed that the lessee will renew the lease at market rates. • To calculate the expected market rental, we have calculated a vacant possession value for the vineyard. On a vacant possession basis we have assumed that a 5 year grape supply agreement on commercial yields at average district prices will be able to be secured.
• The property has access to irrigation water and all licences are in place. We have assumed there are no easements, rights of way or encroachments, except those shown on the title or in the valuation.
• The planting details have been obtained from documentation provided by the current lessees and registered proprietor and we have assumed that the areas stated are accurate.
• Details in relation to historical yields and prices received have also been supplied by the registered proprietor and we have assumed that these are accurate.
Valuation Criteria & Conclusion Vacant Possession Basis
Vines 168.22 ha $43,375/ha $7,296,500
Other Land 37.23 ha $5,000/ha $186,151
Structural Improvements $300,000
Total $7,782,651
Total (Rounded) $7,800,000
Valuation Criteria – Encumbered Basis
Initial Yield Reversionary Yield
Capitalisation Rate 19.000% Capitalisation Rate 10.500%
Rounded Value $9,300,000 Rounded Value $9,300,000
Discounted Cash Flow Inputs NPV of Cash Flows $2,778,972
Cash Flow Term 10 years Discounted Terminal Value $6,996,951
Discount Rate 11.500% Sum of Cash Flows $9,775,922
Terminal Yield 10.750% Less Acquisition Costs ($518,420)
Net Present Value $9,257,502
Rounded DCF Value $9,300,000
Valuation Conclusions – Encumbered Basis
Adopted Value $9,300,000
Passing Initial Yield 19.08%
Equivalent Initial Yield 19.08%
Equivalent Reversionary Yield 10.55%
Internal Rate of Return (including capex) 11.40%
Internal Rate of Return (excluding capex) 11.40%
Direct Comparison $45,266 per ha
Lawsons Vineyard, Riddoch Highway, Padthaway, SA Executive Summary (continued)
Valuation
On an Encumbered Basis
$9,300,000– GST Exclusive
(NINE MILLION THREE HUNDRED THOUSAND DOLLARS)
Vacant Possession Basis
$7,800,000– GST Exclusive
(SEVEN MILLION EIGHT HUNDRED THOUSAND DOLLARS)
Colliers International Consultancy and Valuation Pty Limited
Alex Thamm, AAPI Certified Practising Valuer B Bus Prop (Val) 14 December 2010 (Date of Signing Report)
This report has been verified by Angus Barrington-Case, Associate Director Rural & Agribusiness
NOTE: This Executive Summary must be read in conjunction with the attached report and the details contained therein.
Contents
1 Introduction ...... 3 1.1 Instructions ...... 3 1.2 Information Sources ...... 3 1.3 Basis and Purpose of Valuation ...... 4 1.4 Pecuniary Interest ...... 4 1.5 Date of Valuation ...... 4 1.6 Valuation – Date of Issue ...... 5 1.7 Prevailing Market Conditions – Uncertain Times ...... 5 2 Location ...... 6 3 Title Particulars ...... 7 3.1 Title Reference ...... 7 3.2 Encumbrances, Easements and Interests ...... 7 4 Site Particulars ...... 8 4.1 Site Details ...... 8 4.2 Site Identification ...... 9 5 Planning Controls ...... 10 5.1 Zoning ...... 10 5.2 Planning Approval ...... 10 6 Environmental Issues ...... 11 6.1 Site Contamination ...... 11 6.2 Building Materials ...... 11 7 Statutory Assessment ...... 12 8 Improvements ...... 12 8.1 General comments ...... 12 8.2 Sundry Improvements ...... 14 8.3 Building Condition and Utility ...... 15 9 Tenancy Details ...... 15 9.1 Tenancy Information ...... 15 9.2 Pending Rental Reviews ...... 16 9.3 Lease Expiry Profile and Weighted Lease Duration ...... 16 9.4 Goods and Services Tax (GST) ...... 16 10 Plantings ...... 17 11 Production ...... 19 12 Water and Irrigation ...... 20 13 Market Commentary ...... 21 13.1 Economic Overview ...... 21 13.2 Australian Wine Industry Overview ...... 23 13.3 Local Vineyard Market Overview ...... 25 13.4 Market Sales Evidence ...... 27 14 Financial Details ...... 33 14.1 Income ...... 33 14.2 Outgoings ...... 33 15 Valuation Methodology ...... 34 15.1 Vacant Possession Value...... 34
15.2 Encumbered Value ...... 34 15.3 Capitalisation Approach ...... 34 15.4 Discounted Cashflow Approach ...... 36 15.5 Valuation Conclusions ...... 40 16 Additional Requests ...... 41 16.1 Reasonable Selling Period ...... 41 16.2 Probable Purchaser Groups ...... 41 16.3 Valuation Certificate ...... 41 17 Valuation ...... 42
Appendices
A. CICV Standard Terms of Business B. Letter of Instruction C. Title Searches D. Planning Controls E. Water Licence Copy F. Valuation Calculations Schedules G. Valuation Certificate
1 INTRODUCTION
1.1 INSTRUCTIONS
We have received written instructions from Bonita Ho, CK Life Sciences Int’l., Inc, dated 2 December 2010, to determine the Market Value of Lawson’s Vineyard, Riddoch Highway, Padthaway, SA on behalf of Regenal Investment Pty Limited in accordance with the Hong Kong Stock Exchange’s regulatory requirements to determine the current market value for major transaction purposes as at 31 December 2010.
Our valuation has been prepared in accordance with Australian Property Institute (API) Valuation Standards.
We have assumed that the instructions and subsequent information supplied contain a full and frank disclosure of all information that is relevant. Furthermore, we have prepared our valuation in accordance with our standard Terms of Business as previously provided to you and as appended at Appendix A.
The authenticity of this report and valuation contained herein may be confirmed by telephoning the signatory or the Valuation Director at the issuing office.
A copy of the Letter of Instruction is attached at Appendix B.
1.2 INFORMATION SOURCES
Our valuation conclusions have been reached after reviewing financial, tenancy and production information provided by Challenger Wine Trust. The information reviewed and supplied includes, although is not limited to, the following:
• Executed Extension of Lease documents; • Details of the current passing rent;
• A 2008 prepared independent viticultural report; • Planting details; • Historical yield data;
• Water licences; and • Other relevant information.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 3
1.3 BASIS AND PURPOSE OF VALUATION
The subject property in our opinion is likely to be regarded as a leased investment. Consequently, in adopting this definition of value we are of the opinion that it is consistent with the definition of Market Value defined by International Valuation Standards Committee (IVSC) and endorsed by the Australian Property Institute (API).
"Market Value” is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion."
This valuation report is provided by CICV and not by any other company in the Colliers International Group. The valuation report has been prepared major transaction purposes and should not be relied upon for any other purpose or by any person other than Regenal Investments Pty Limited. CICV accepts no responsibility for any statements in this report other than for the stated purpose. This report is issued on the basis that no liability attaches to the companies in the Colliers International Group other than CICV in relation to any statements contained in the valuation report.
1.4 PECUNIARY INTEREST
We advise that the Valuer nominated within this report is authorised under the relevant laws of South Australia to practice as a Valuer and has had in excess of five (5) years continuous experience in the valuation of similar property to the subject.
Further, we confirm that the nominated Valuer does not have a pecuniary interest that could conflict with the proper valuation of the property, and we advise that this position will be maintained until the purpose for which this valuation is being obtained is completed.
1.5 DATE OF VALUATION
31 December 2010 based upon our inspection of 26 October 2010. Due to possible changes in market forces and circumstances in relation to the subject property the report can only be regarded as representing our opinion of the value of the property as at the date of valuation, which has been based on appropriate assumptions determined as at the date of signing of report. We have assumed that there have been no factors impacting on the physical or structural condition of the property between the date of inspection and valuation that could have impacted on the market value of the property. This includes frost events, and any such impacts should be referred to the valuer for comment.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 4
1.6 VALUATION – DATE OF ISSUE
In accordance with your written instructions dated 2 December 2010, our inspection of the subject property as at 26 October and the requested date of valuation as at 31 December 2010, we confirm that in accordance with your instructions this final valuation report has been provided as at 31 December 2010 (Date of Valuation).
We have assumed that there will be no change to the property or the market between the date of issue and the date of valuation. Should we become aware of any relevant market information that may impact on the value of the property, up to and including 31 December 2010, we at our own discretion reserve the right to review and possibly amend the valuation analysis contained herein.
1.7 PREVAILING MARKET CONDITIONS – UNCERTAIN TIMES
The events of early 2008 including the initial sub-prime fallout in the United States and subsequent Global Financial Crisis (GFC) created uncertain times for both the equities and property markets in Australia which impacted to varying degrees upon a variety of market participants. The initial impact was focussed on the Listed Property Trust sector operating assets within the major commercial, industrial, retail and infrastructure sectors. While a degree of uncertainty still remains within these markets, the magnitude is notably less than that evident throughout 2008 and the majority of 2009. Improving levels of general market activity over recent times appears to have resulted in growing investor confidence, albeit shallower than that experienced prior to the GFC. The rural property market has typically lagged the experiences of the other major markets and traditionally has not displayed their volatility. However there have been some very substantial collapses within the managed investment scheme sector in particular that have dampened investor confidence. The very rapid tightening of credit availability that resulted from the GFC remains an issue within the Australian rural property market with LVR requirements causing a general pull back in many regional markets.
In light of the improving levels of market activity evidenced in CBD and major regional real estate sales and leasing markets over more recent times, we note that investment returns for good quality assets with secure cash flows in many instances appear to have stabilised, and in some instances are showing signs of tightening. However, in contrast to this observation we note poorer quality assets and particularly those with considerable existing vacancy and / or short term major tenant expiry continue to be priced by the shallower market on an opportunistic basis, and thereby remain at risk of a prolonged period of softer yields. The same can be said for rural property markets where although transactions are rarely measured or negotiated on a yield basis, quality land types have retained more demand and hence tended to hold values ahead of less productive, secondary land types.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 5
2 LOCATION
The property is located on both the eastern and western sides of Riddoch Highway to the north of its intersection with McBrides Road and south of its intersection with Hodgson Road. Grubbed Road, a single lane bitumen surfaced road of good quality adjoins the western boundary of the property. The property is located approximately six kilometres south of the South Eastern South Australian settlement of Padthaway which in turn is located approximately 47 kilometres north of the south east regional centre of Naracoorte.
A limited range of services and facilities are available within Padthaway, however, a good range is available at Naracoorte.
Development surrounding the subject property comprises a combination of established vineyards together with broad hectare cropping and grazing properties as well as some smaller rural residential living style properties.
Source : www.landservices.sa.gov.au/Property Location Browser
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 6
3 TITLE PARTICULARS
3.1 TITLE REFERENCE
Title Details
Search Date 1 November 2010
Local Government Area Tatiara District Council
Area Padthaway
Hundred Glen Roy
Legal Description Folio Registered Proprietor Area
Allotment 4 within Filed Plan 137764 5249 / 919 Challenger Listed Investments Ltd 71.43 ha approx.
Allotment 5 within Filed Plan 137765 5249 / 918 Challenger Listed Investments Ltd 66.77 ha approx
Allotment 9 within Filed Plan 105665 5203 / 92 Challenger Listed Investments Ltd 67.25 ha approx
The combined area of the three titles is 205.45 hectares or thereabouts.
3.2 ENCUMBRANCES, EASEMENTS AND INTERESTS
We highlight the following notations on Titles:
Certificate of Title Notation Description
5249 / 919, 5249 / 918, 9791788 Mortgage to Australia & New Zealand Banking Group Ltd 5203 / 92 10517216 Caveat by Pernod Ricard Pacific Pty Ltd
10517218 Lease to Pernod Ricard Pacific Pty Ltd commencing on 1.7.2006 and expiring on 30.6.2013
5203 / 92 Easement Subject to the easement over the land Marked A to the Electricity Trust of South Australia
The caveat is protecting the lessee’s option to purchase the property
We have assumed that there are no other encumbrances or notations except those shown on the title or noted in this valuation report.
We also note that this valuation is conditioned upon the basis that the abovementioned encumbrances or easements on title have no material affect on value, marketability or current development.
We have assumed there are no easements, rights of way or encroachments except those shown on the title or in the valuation.
A full copy of the title search is attached at Appendix C.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 7
4 SITE PARTICULARS
4.1 SITE DETAILS
Area and Dimension The subject property comprises three allotments having a total land area of 205.45 hectares approximately.
The property has a western frontage to Riddoch Highway of 965.21 metres, a combined eastern frontage to Riddoch Highway of approximately 555.2 metres and a westerly combined frontage to Grubbed Road of approximately 658 metres. The remainder of the boundaries adjoin private landholdings. We confirm that we have not independently checked these measurements on site and have relied on the diagram attached to the certificate of title.
Topography and Soils Soils on the property vary from a reddish brown sandy loam over a clay and limestone base situated towards the eastern end of the property through to a red brown sandy loam over clay within the western portion of the property. The range section or portion of the property located on the eastern side of Riddoch Highway generally comprises deep sands over a limestone base, however, there are areas of sandy loams over clays located within the lower portions of the allotment.
Drainage The property appears to be well drained, however, in heavy rainfall events we would expect areas of surface water pooling.
Access The principal point of access to both the eastern and western allotments is from Riddoch Highway, with the western allotment also having access from Grubbed Road
Utilities Services connected to the property include single and three phase electricity, telephone and internet as well as bore water. Supplementary water is available from rainwater catchment and effluent disposal is via a septic tank system.
Below are images showing the general aspects of the property:
Riddoch Highway frontage View north west over vineyard
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 8
4.2 SITE IDENTIFICATION
The site has been identified by reference to the Title Plans and aerial imagery and as delineated on the map below.
Source : 2010 Google Maps
We have physically identified the boundaries of the property and whilst there does not appear to be any encroachments, we are not qualified surveyors and no warranty can be given without the provision of an identification survey.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 9
5 PLANNING CONTROLS
5.1 ZONING
Local Government Area Tatiara District Council
Consolidated 4 February 2010
Zoning Primary Industry
Objectives General Objective 1: The long-term sustainability of primary industries. Objective 2: The long-term protection of agricultural land from incompatible land use. Objective 3: Prevention of pest plant invasion and effective management of existing pest plant problems. Water Objective 4: Protection of the supply and quality of water resources and the maintenance of natural hydrological systems and environmental flows. Noise Objective 5: Prevention or minimisation of adverse impacts resulting from noise. Built Form and Design Objective 6: Buildings and structures which are compatible with the environmental qualities, built form and character of the surrounding area and landscape, and which minimise the potential for impact from rural based activities. Land Division Objective 7: Allotments of a size and configuration which:
(a) take account of environmental features, existing development, site constraints and the availability of infrastructure; (b) promote the efficient use of rural land for primary industry; and (c) discourage land uses that are incompatible with primary industry. Dwellings Objective 8: New residential development only where:
(a) there is a demonstrated ongoing connection with primary production which can be sustained in the long term; and (b) the use of a residence will not compromise the continuation of primary production within the zone. Rural Based Industrial Development Objective 9: Development of industries which have a direct association with primary industries and which are sited and designed so as to not have an adverse impact on primary industries and the character and amenity of the locality.
Heritage Listing Our research indicates that the subject property is not heritage listed.
Native Title Our research indicates that the subject property is not subject to any native title claim
5.2 PLANNING APPROVAL
We are unaware of any proposals to amend the current zoning within the region from our discussions with council. Furthermore, commercial vineyards are a permissible use within the zoning guidelines. A copy of the zoning guidelines is contained with Appendix D.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 10
6 ENVIRONMENTAL ISSUES
6.1 SITE CONTAMINATION
A visual site inspection in consideration of the past land uses has not revealed any obvious pollution or contamination.
The property has been used wine grape growing for a number of years. During these activities, chemicals in the form of fertilisers and sprays would have been applied to the land and fuel and oils stored on the land. These activities could have given rise to low level contamination similar to that found in the district and reflected in the prices paid generally for land in the area.
We are not aware of the fully details with regard to usage of the site prior to the current use, however, we have no cause to believe that the site has been contaminated. However we advise that we are not experts in the detection or quantification of any environmental problems, and accordingly have not carried out a detailed environmental investigation. Furthermore we have not been provided with an environmental audit report of this site.
Therefore, this valuation is made on the assumption that there are no actual or potential contamination issues affecting: i) the value or marketability of the property; ii) the site.
Verification that the property is free from contamination and has not been affected by pollutants of any kind should be obtained from a suitably qualified environmental professional. Should subsequent investigation say that the site is contaminated, this valuation will require revision.
6.2 BUILDING MATERIALS
Our site inspection did not reveal any obvious signs of asbestos products however we cannot certify the site free of contamination.
We recommend that if the parties whom wish to rely on this report have any concerns in relation to potential asbestos contamination, they should request the owner to commission a survey and to prepare an Asbestos register.
Should such a survey detect installed asbestos products, we recommend that the details of that survey be provided to us in order that we may consider any potential implications to our assessment and effect amendment to our report, should that be necessary.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 11
7 STATUTORY ASSESSMENT
The Valuer General conducted a general valuation within the District of Tatiara Council as at 1 January 2010, and determined values as they relate to the subject property for the 2010/11 financial year as follows:-
Certificate of Title Valuation No. Site Value Capital Value
5249 / 918 & 5249 / 919 4008017008 $830,000 $2,400,000
5203 / 92 4008020100 $400,000 $1,150,000
These valuation amounts are used for rating and taxation assessments only and are quoted for information purposes only.
8 IMPROVEMENTS
8.1 GENERAL COMMENTS
The majority of the structural improvements on the subject property are located on Allotment 4 with the exception of the house which is located on Allotment 9 on the eastern side of Riddoch Highway. The main work compound is neat and tidy with colour coded buildings. The improvements are depicted and described as follows:
Main Dwelling
A conventional style cream brick dwelling which appears to have been constructed in the 1960’s and set in landscaped surrounds and enjoys views to the west over Riddoch Highway towards the main vineyard plantings. The dwelling offers four bedroom accommodation together with formal lounge, dining and kitchen/meals area. The dwelling has a single bathroom, laundry with shower and an office. The dwelling is of double brick construction with steel framed windows and timber flooring and has a single brick garage under the main roof and verandah to the eastern and western elevations. Our check measurements disclosed the building has an equivalent area of157 square metres or thereabouts. It should be noted that we have not internally inspected the dwelling as it was occupied at the date of inspection and our description is based on information provided by the vineyard manager.
Office / Lunchroom
A timber framed weatherboard clad building with corrugated iron roofing, timber flooring with vinyl flooring coverings. The building is disposed as a kitchen/lunchroom with individual offices and staff amenities. This building is of a basic level of appointment, however, fully functional for its current use. Our check measurements disclosed the building has a total area of 91 square metres or thereabouts with additional verandas of 55 square metres.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 12
Chemical Shed
Approximately 135 square metres in total area of steel framed construction with corrugated iron roof cladding, metal deck wall cladding and concrete flooring. The shed is disposed as a drive through canopy (81 square metres) and enclosed section (54 square metres) and features a low profile bunded load area (drive-over bund), fluorescent lighting, emergency wash and rain water tank.
Irrigation Shed
A modern steel framed shed with ‘colorbond’ roof and wall cladding and earthen floor with a sunken pit housing the bore and pressure pump. The shed has a total building area of 69 square metres with an adjoining shed of 16 square metres.
Workshop
A steel framed shed with ‘metal deck cladding and a corrugated galvanised iron roof built on a concrete base with three phase power connected. The shed has a building area of 136 square metres or thereabouts.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 13
Implement/Storage Shed
A steel framed web truss shed with corrugated galvanised iron wall and roof cladding built on a part concrete and part earthen base. The shed has personal and sliding door access as well as open ended implement storage. The shed has a total building area of 216 square metres or thereabouts.
Implement Shed
A steel framed web truss constructed shed with corrugated galvanised iron roof and wall cladding and a concrete base. The shed has high clearance weldmesh doors fitted to one end providing lock-up implement storage. The measurements for this shed are not known.
8.2 SUNDRY IMPROVEMENTS
There are various sundry buildings including a fuel storage facility former office of timber framed construction (some termite activity noted) and various pump sheds. The property is run in conjunction with the Richmond Grove Vineyard situated approximately 5 kilometres to the south and consequently the structural improvements on Lawson’s Vineyard are not fully utilised with the exception of the house and main chemical shed. Other site improvements include all weather crushed metal roadways, perimeter fencing and numerous rainwater tanks.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 14
8.3 BUILDING CONDITION AND UTILITY
We are not aware of any notices currently issued against the property and expert opinion has not been sought in respect to the building structure or the plant and equipment, however our limited enquiries have not revealed any major defects. The improvements are considered to be in reasonable condition for their age other than where noted.
We have assumed that the property complies with the appropriate statutory, building and fire safety regulations.
We have also assumed that there is no timber infestation, asbestos or other defect other than where noted and have made no investigations for them nor have we undertaken a structural survey or tested the building services.
9 TENANCY DETAILS
9.1 TENANCY INFORMATION
The following is a summary of the Lease.
Leased Premises Lawsons Vineyard
Lease Status Registered Lease 10517218
Lessee Pernod Ricard Pacific Pty Ltd
Term 7 years commencing 1 July 2006
Expiry 30 June 2013
Option Three rights of renewal of four years each
Initial Rental $1,661,803.70 per annum excluding GST. Payable monthly
Current Rental $1,774,859 per annum excluding GST (including upgrade consideration rent)
Review Basis Annual to 1.5% for years 2007- 2009 then annual to 0.75% until expiry
Outgoings Lessee to pay all outgoings as the lease is triple net
Permitted Use Viticulture
GST Lessee to reimburse Lessor
Special Conditions Should the Lessee wish to renovate, extend, or make other capital or structural improvement then Upgrade Consideration Rent (UCR) will be payable on the monies paid by the lessor for the upgrade. UCR is payable on the first day that the Upgrade Consideration payment is made. The amount payable is calculated to be 9.0% of the Upgrade Consideration Amount and is payable monthly. The UCR is reviewed annually at the same rate as the initial lease and will cease when the next market review occurs. The Lessor grants Pernod Ricard Pacific Pty Ltd the option to purchase on the terms and conditions contained in the option deed.
Discussions with representatives of Challenger Wine Trust have revealed the tenant is not in arrears with any rental payments.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 15
9.2 PENDING RENTAL REVIEWS
We note that the next rental review is due on the 1 July 2011.
9.3 LEASE EXPIRY PROFILE AND WEIGHTED LEASE DURATION
Average Lease Duration 2.50 years
Weighted Lease Duration by Area 2.50 years
Weighted Lease Duration by Income 2.50 years
9.4 GOODS AND SERVICES TAX (GST)
We note that the property would be considered a Going Concern under the Australian Taxation Office Ruling GSTR 2002/5, and as such would not attract GST on the sale price. In this regard we further advise that this valuation is a GST exclusive market valuation, on the basis that the property would be sold as a Going Concern.
This valuation is based on the assumption that any GST levied or imposed on or in respect of any supply made under or in accordance with both the current and future leases, that the amounts payable for that supply will be increased by the amount of GST so levied or imposed. If this assumption is found to be incorrect, or if the party on whose instruction this valuation is provided wishes our valuation to be based on a different assumption, then this valuation should be referred back to the Valuer for comment and in appropriate cases, amendment.
Even where a lease appears to address the issue of GST, the Valuer expresses no view as to whether the provisions of the lease entitle the lessor to pass on the GST to the lessee, as to do so would require the Valuer to express a legal expert opinion. The Valuer recommends that before relying on the valuation the parties should undertake a legal audit of all contracts affecting the property including lease documentation and to check the results against the assumptions made within the valuation report.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 16
10 PLANTINGS
According to details provided by the client, the following plantings have been developed on the subject property:
Variety Year planted Area (ha)
Cabernet Franc 1990 5.32
Cabernet Sauvignon 1989-93 40.14
Chardonnay 1989-91 27.66
Merlot 1991-05 22.9
Sauvignon Blanc 1990 5.32
Shiraz 1989-05 66.87
168.21
In relation to the vineyard areas, please note that whilst we have carried out a check of the planting grid during our physical inspection, we did not measure the vine rows and have adopted the areas as set forth from details provided by Challenger Wine Trust and Pernod Ricard Pacific Pty Ltd. Vineyard trellising comprises treated pine end and intermediate posts to which has been affixed a combination of single and double cordon wires with a top catch wire and low set drip wire. Intermediate posts are spaced at six metre intervals and there are approximately three vines per panel with the vineyard developed on a planting grid of 2.6 or 2.75 metre row spacings by 1.8 metre vine spacings. These planting grids indicate vine densities ranging from 2,020 to 2,137 vines per hectare
The trellis infrastructure appeared in good condition, although some of the older plantings are on T-trellising. However, we have been advised by the vineyard manager that some posts are typically replaced as part of routine maintenance after harvest.
We understand the vines on average are irrigated at a rate of between 1 and 1.5 mega litres per hectare in an average year with the exception of some of the Chardonnay which is irrigated at a rate of around 2.5 mega litres per hectare as larger crops are targeted and this is evidenced in the production figures.
Vine health generally appears to be in good order, however, we note that the property is situated within a high risk frost area and as at the date of inspection, there was no frost control system fitted to the vineyard.
A selection of images showing the vineyard are set out overleaf.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 17
Chardonnay plantings Shiraz (A) single cordon trellis with top catch wire
T-trellis Shiraz Cabernet Sauvignon (frost damaged 2010)
View west from the eastern section T-trellis Shiraz
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 18
11 PRODUCTION
The following table sets out the average annual production of the vineyard by variety:
Year Area % 7 year Variety 2004 2005 2006 2007 2008 2009 2010 planted (ha) planted average
Cabernet Franc 1990 5.32 3.16% 17.83 11.16 15.84 7.52 12.63 23.66 15.11 14.82
Cabernet Sauvignon 1989-93 40.14 23.86% 14.32 6.2 8.56 4.69 8.13 6.47 8.47 8.12
Chardonnay 1989-91 27.66 16.44% 25.07 19.09 26.72 5.22 25.93 19.57 13.34 19.28
Merlot 1991-05 22.9 13.61% 11.76 16.07 12.85 9.62 4.35 12.91 11.84 11.34
Sauvignon Blanc 1990 5.32 3.16% 25.75 19.1 20.78 10.02 20.81 12.71 17.09 18.04
Shiraz 1989-05 66.87 39.75% 15.84 10.49 7.8 4.01 12.24 6.87 15.03 10.33
168.21 100.00% 16.82 11.93 12.44 5.44 12.72 10.40 12.82 11.80
It can be seen in the above table that average yields range from 4.35 tonnes per hectare for the 2008 Merlot through to 26.72 tonnes per hectare for the Chardonnay in 2006. We also note that the data is slightly skewed by the 2007 vintage results where severe frost damage was experienced throughout the Padthaway GI. Even allowing for this event it is our observation that the vineyard would be regarded by market participants as possessing proven commercial production characteristics having delivered good even results for a sustained period of time. The average yields for red varietals have fallen between 8 and 11 tonnes per hectare other than the heavier cropping Cabernet Franc. Whites have achieved averages in the 18/19 tonnes per hectare range. It is our expectation that average yields within the region would be in the order of 8 to 10 tonnes per hectare for red varieties and 12 to 14 tonnes per hectare for white varieties. In relation to the heavier average Chardonnay crop we believe that this patch is being cropped at higher levels for specific use in sparkling wine base. We also understand that the 1968 Shiraz plantings provide super premium source fruit for the flagship “Lawsons” Shiraz (RRP AUD55.00+).
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 19
12 WATER AND IRRIGATION
Water for irrigation purposes is sourced from a series of underground bores contained within the property and held under Water Licence No. 7038 allowing for a total of 339.51 mega-litres of irrigation water to be taken from the Padthaway Prescribed Wells area for vineyard irrigation purposes. In addition we have been advised that an additional 33.95 mega-litres of temporary bridging water is available until 30 June 2011. This equates to a total permanent allocation of 2.03 mega litres per hectare of vineyard plantings. It is our opinion that this allocation is sufficient for the current use of the property, however, in the event that frost protection is fitted, additional water may be required.
Irrigation water is pumped by a series of Thompson and Kelly turbine pumps coupled to 37 kilowatt Western Electric three phase motors that pump water from a depth of approximately 6.4 metres (21 feet) to a central main line that in turn supplies a series of sub mains which are connected to in-line pressure compensated drip delivery tubes. We have been advised that the water quality in the area is between 900 and 1,000 parts per million.
It should be noted that the range block or allotment located on the eastern side of the Riddoch Highway is irrigated from the main property and as a consequence, if this property was to be sold separately, agreements would have to be put in place to ensure a continuation of water supply.
A copy of the water licence is contained within Appendix E.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 20
13 MARKET COMMENTARY
13.1 ECONOMIC OVERVIEW
Cash Rate Holds Steady After increasing the official cash rate by 75 basis RBA Cash Rate points between March and May 2010, the 8% Reserve Bank of Australia (RBA) decided in 7%
September 2010 to maintain the cash rate at 6% 5.21% 5% 4.50%. The RBA’s decision was based on the 4.50% view that global growth will probably ease back 4% to about trend pace over the coming year. In Cash Rate (%) 3% addition, financial markets are functioning more 2% smoothly than they were a few months ago. The 1%
RBA also noted that commodity prices are off 0% Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 their peaks, though those most important for Sep-99 Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Australia remain at very high levels, and the Cash rate 10 Year Average Source: RBA / Colliers International Research terms of trade have regained their peak of two years ago. Information suggesting that the Australian economy had been growing at around trend pace added further evidence to the “do nothing” approach in September. Market economists presently consider that further rises are inevitable but may not happen before the end of 2010. The September quarter 2010 CPI release in October will provide crucial indications of the strength of price pressures that will inform the RBA’s next decision.
Inflation above RBA Target
Recent data released by the Australian Bureau Consumer Price Index (CPI) of Statistics (ABS) showed the national Annual Change -Headline Inflation Consumer Price Index (CPI) recorded a growth 8% of 0.6% in the June 2010 quarter. This equates 7% to an annual headline inflation growth rate of 6% 3.1% from March 2009 to March 2010, 5% 4% increasing above the RBA’s target range of 2- 3.1% 3% RBA's Target Range 2% - 3% 3%. Underlying inflation increased by 0.5% over in Change CPI Annual 2% the March 2010 quarter, equating to growth of 1%
2.7% over the year. The most significant price 0% rises during the March 2010 quarter were for -1% Jun-95 Jun-96 Jun-97 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 tobacco (+15.4%), hospital and medical services Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 (+3.8%), automotive fuel (+2.1%), rents (+1.1%) Source: ABS / Colliers International Research and house purchase (+0.6%). While the most significant offsetting price falls were for domestic holiday travel and accommodation (-6.0%), fruit (-4.8%), audio, visual and computing equipment (-6.3%) and vegetables (-3.0%). The latest forecasts from Westpac Bank suggest that inflation will increase 1.2% during the September 2010 quarter, to 3.3%.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 21
Australian Dollar Appreciates Further
Ongoing uncertainty in the performance and rate of recovery of the United States economy has seen the Australian Dollar strengthen beyond the US0.90c mark. After reaching a high of US0.93c in March 2010, the Australian dollar declined to a low of US0.84c in July before recently rebounding to US0.9331c on the 14th September 2010. The Trade Weighted Exchange Index (TWI), which ranks the Australian dollar against the currencies of our significant trading partners, has also strengthened after falling to 66.4 points at the start of July 2010 and now sits at 71.4 as of 14th September 2010.
GDP Growth Accelerates
Australian National Accounts data for the June Gross Domestic Product (GDP) Seasonally Adjusted Quarter 2010, show that GDP continued to 6% accelerate, growing by a stronger than expected 5%
1.2% on a seasonally adjusted basis. This result 4% has reinforced Australia’s position as one of the 3% best performing economies in the developed 2% world. Notably, private consumption provided the 1% Change from previous period previous from Change largest contribution to growth during the quarter. 0% This is a timely shift away from the recent phase -1% of reliance on public expenditure to stimulate -2% Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 economic growth. While this is an enviable result Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Quarterly Change Annual Change by world standards, Australia’s future economic Source: ABS / Colliers International Research growth will continue be influenced by conditions in the US, Europe and mostly Asia. Australia remains well positioned to accommodate coal and ore demand from the rapidly urbanising China and from India. Access Economics forecasts GDP growth of 3.5% for 2011.
Unemployment Rate Heads Towards 5%
In more evidence of a national economy that is National Unemployment Rate gathering steam, the latest Labour Force data Seasonally Adjusted 8% shows that, in seasonally adjusted terms, national employment rose by 30,900 persons in 7% 10 Year Average 6% August 2010, well above market expectations. 5.4% 5% This rise in employment pushed the 5.1% unemployment rate in August 0.2 percentage 4% point lower to 5.1%. Expectations were for an 3% Rate Unemployment unchanged unemployment rate of 5.2%. This 2% rise in employment was driven by an increase in 1% full-time employment, up 53,100 to 7.920 million 0% Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 that was partially offset by a decrease in part- Aug-99 Aug-00 Aug-01 Aug-02 Aug-03 Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Source: ABS / Colliers International Research time employment, down 22,100 people to 3.352 million.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 22
13.2 AUSTRALIAN WINE INDUSTRY OVERVIEW
The Australian wine industry is currently experiencing some challenging times with the following factors contributing to varying levels of optimism across the industry:
• The wine industry has experienced a level of insecurity in both demand and supply over the preceding 24 months. • Figures released by The Winemakers Federation of Australia show the 2010 wine grape crush yielded approximately 1.53 million tonnes, which is below the five-year average of 1.68 million tonnes, bringing it to a level closer to current demand. The Winemakers Federation of Australia’s estimate of red intake is 817,000 tonnes or 53% of the total crush and the white intake is estimated to be 715,500 tonnes or 47% of total crush. The 2010 crush was shorter than industry experts anticipated. History tends to suggest that when annual grape crushes have been around the 2010 level (close to equilibrium) buying competition from wineries can occur throughout harvest. Unfortunately for grape growers this was not the case for 2010. This lack of buying activity may be due to low financial returns being experienced in the industry. In the event a similar scenario occurs for the 2011 vintage we may see this increased profitability in the industry flow through to property transactions. • According to publications released by Australian Bureau of Agricultural and Resource Economics (ABARE), Australia has approximately 162,000 hectares of grape vines in production. For the year ending 30 June 2010 approximately 7,000 hectares were removed from mainly inland warm climate regions and 13,000 hectares not harvested. We expect to see additional vines removed in the short to medium term as a result of poor economic prospects in the industry
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 23
• There has been a limited amount of voluntary market activity occur throughout the major Australian wine growing regions in the past twelve to eighteen months. Large wine companies including Australia Vintage Limited, Constellation Wines Australia (CWAU), Fosters Wine Estates (FWE) and Lion Nathan to name a few have or are in the process of divesting a number of assets and reviewing their business structures. The reviews have placed a substantial volume of assets on the market which are largely a result of balance sheet driven decisions. This flood of assets to the market has resulted in buyers being awash with choice. Our research has revealed that in some instances transactions have occurred at rates indicative of vacant land values for their respective locations given the lack of returns able to be generated from these assets.
• In May 2010 Fosters the largest vineyard owner (circa 9,000ha), announced plans to pursue a demerger of their Beer and Wine business (Treasury Wine Estates), creating separately listed businesses. No decision on timing or structure of the demerger has been announced. In September 2010 Foster’s announced it had received an unsolicited expression of interest from an international private equity firm to acquire the wine assets of Treasury Wine Estates for a cash consideration of between $2.3 billion and $2.7 billion for 100% of the assets. The proposal was rejected. As at 30 June 2010, Treasury Wine Estates had sold 22 of the 36 vineyards identified for sale, with total sale proceeds of $59.5 million which is well below the purported book value of circa $200 million for all the assets offered for sale.
• In addition to the above large wine companies, many small to medium wine companies both prominent and secondary locations have offered assets for sale with mixed results. We also are aware of some industry participants who have received pressure to maintain financing covenants at suitable levels. Broad estimates have revealed that over the past two years in excess of $750 million worth of wine industry assets has been offered for sale nationally of varying sizes, locations and price points. A figure which is well above normal market conditions prior to the GFC.
• The recent uncertain times that are being experienced globally are contributing to a decrease in profits and the value of exports as well as excess supply and growth in global competition. Our currency (AUD) is currently trading at around parity with the US dollar (Nov’10) up from a low of $US0.61 (October 08). The very high Australian dollar has contributed to eroding export profits and the price competitiveness of Australian wine exports on the overseas market. According to The Australian Wine and Brandy Corporation in the year ending June 2010, the volume of Australian wine exported increased 3.3% to 775 million litres, primarily made up of bulk wine. The total value was AUD$2.17 billion in the year ended June 2010. Factors that contributed to the volume growth were stock clearing through opportunistic bulk wine exports priced at below $1AUD per litre and an increase in branded bulk wine packaging offshore, particularly in the UK and US.
• Australia is still the fourth largest exporter of wine in the world and the sixth largest producer accounting for about 5% of world production.
• Tightened trading conditions in the domestic retail market as a consequence of retail consolidation (Coles and Woolworths further expand their retail liquor and hotel markets). Producers have had margins squeezed in order to gain shelf space and reduced margins at the retail end have flowed through to affect grape prices at winery intake level. This is a phenomenon that is impacting on wine companies in most developed markets. Its impacts are not confined to the wine industry with other agricultural and horticultural producers also suffering.
• Further to the tightening trading conditions, supermarkets are now launching their own low cost price products without the need of capital infrastructure. This is largely a result of the oversupply and depressed fruit prices as well as the consortiums existing retail and supply chain networks.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 24
• The water supply situation appears to somewhat have abated as a result increased rainfall across the Murray Darling Basin and other major wine growing regions. Water allocations in many irrigation areas are already significantly higher than the whole of the 2009/10 irrigation season and will continue to rise throughout the 2010/11 irrigation season if inflows continue to be positive.
• In addition to the previous issues discussions with many growers have revealed that 2010 grape prices are down by as much as 50% in some regions with the average being in the order of 30%. As a consequence of these price reductions the Wine Grape Growers Australia are warning that there may be a mass exodus from the industry because of a lack of profitability within the sector.
13.3 LOCAL VINEYARD MARKET OVERVIEW
The Padthaway GI is a premium cool climate wine region located within the wider Limestone Coast wine region in the South East of South Australia. The Limestone Coast region is split up into five viticultural zones, namely Coonawarra, Wrattonbully, Padthaway, Mount Benson and Robe. Combined the zones have approximately 15,707 hectares of vineyard planted of which approximately 4,100 hectares is in the Padthaway GI according to data sourced from the Phylloxera and Grape Industry Board. Only the Coonawarra GI has more plantings.
Wine Production by Region Padthaway 50,000 $100,000,000 45,000 $90,000,000 40,000 $80,000,000 35,000 $70,000,000 30,000 $60,000,000 25,000 $50,000,000
Tonnes 20,000 $40,000,000 15,000 $30,000,000 Estimated Value Estimated 10,000 $20,000,000 5,000 $10,000,000 0 $0 2005 2006 2007 2008 2009 2010
Total Red Total White Total Est Value
Source : Phylloxera and Grape Industry Board of SA and Colliers International Research
As can be seen from the graph above, the total tonnage from wine grapes within the GI in 2010 is close to the five year average, with estimated value also trending the same way.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 25
There have been a limited number of transactions within the Limestone Coast region in the past three years, with some large commercial vineyards being placed on the market and finding buyers at deeply discounted rates. Sales that have occurred have either been to adjoining owners buying out a property to shore up water supply or acting because the offer price was low enough to compel buyer activity. The limestone Coast region has experienced its fair share of difficulties over the past few years with a number of quite severe frost events and the general oversupply status of cool climate wine grapes in Australia.
The current abundance of property being offered to the market within the Padthaway GI is also likely to have a dampening effect on property values. Recent offerings include Padthaway Estate, Constellation Wines Australia (CWAU) and Fosters Wine Estates Padthaway holdings. We are of the opinion that what would ordinarily be considered good sales evidence in some of the transactions outlined in the next section, is in fact more representative of over eager seller circumstances. As such we hold some concerns as to their status as evidence of current market values for well managed vineyards with good grape supply agreements in place to well recognised local or national wine producers.
Discussions with selling agents conducting both public and off market campaigns have revealed that no willing but not over-eager sellers would contemplate offering vineyards for sale in the current market.
In terms of recent market offerings, CWAU announced in August 2008 they would be undertaking a review of their assets nationwide. Seven properties (six vineyards and a winery and vineyard) were publicly offered to the market, with two each in the Coonawarra and Wrattonbully GI’s and three in the Padthaway GI. Our enquiries disclosed that a number of expressions of interest were lodged at the time however a considerable amount of time was subsequently required to secure sales.
In addition Padthaway Estate (winery, vineyard, labels, stock, historic buildings and complimentary improvements) is currently being actively marketed for sale. The property is being advertised at in excess of $10 million. Discussions with the selling agent have revealed that they have received a moderate level of interest mainly from high net worth individuals who are looking to either expand their interests in the wine industry or enter the industry.
Despite the aforementioned we have recently seen the sale of two of the Fosters vineyards Garrett’s and Tolley’s in the Padthaway region. Both vineyards were offered to the market with grape sale agreements however these agreements were very restrictive in terms of tonnages. The Garret’s contract is for a total of approximately 195 tonnes and the 2008 vineyard yield was 1,004 tonnes, equating to a contract shortfall in the order of 809 tonnes on 2008 yields.
Looking forward we see the Limestone Coast to be well placed to weather the water crisis because of the vast amounts of good quality underground water at the regions disposal. Having said this, the region is notorious for its severe frost events which have had a devastating effect on recent production results.
It is our opinion that well managed vineyards with good grape supply contracts, varietal balance, water supplies and frost protection should achieve prices within the $40,000 to $50,000 range, with variances outside of this range a consequence of size, age, development and contract status. However considering the volume of assets on the market in order to achieve a quick sale massive discounting (60-70%) may be required
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 26
13.4 MARKET SALES EVIDENCE
In assessing the market value of the subject property, we have considered a number of sales transactions including the evidence outlined overleaf. It is important to note that the sales that have transacted in recent times have virtually all been at little more than land and water values. There is limited demand for uncontracted vineyards in the current market and vendors have been required to accept deep discounts to below cost of establishment in order to achieve a sale in the current climate.
Lindemans Vineyard- Riddoch Highway, Padthaway SA
This vineyard is located on the Riddoch Highway/Vogelsang Road corner at Padthaway approximately 45 kilometres north of Naracoorte. The property was one of the earliest large commercial vineyards in the Padthaway district and appears to have been well managed. Soils on the property generally comprise loams over a clay base. Water for irrigation purposes is sourced from two bores situated on the property. Building improvements include an office and meeting room, machinery shed, chemical shed and amenities.
Sale Particulars
Sale Date July/August 2010 Water Details Bores – 1,309.8 mega litres Sale Amount (unconfirmed) $5,000,000 Irrigation Method Drip irrigation Vendor Fosters Geographic Indication Padthaway Purchaser Private Grape Supply AgreementsNil Property Area (ha) 630 Vineyard Trellising Treated pine ends and intermediate posts.
Vineyard Area (ha) 597 Vineyard Age 1970’s to 1990’s
Roadways and Headlands (ha) 32.90
Analysis Varietal Composition
Rate per Hectare Overall $7,937 Rate per Hectare Vines $7,763 Rate per Hectare Roadways and $5,000 headlands
Structural Improvements $200,000 Price Ratio 0.83
Comments
The property was sold as part of a large portfolio of vineyards that were surplus to Fosters requirements. The property has purportedly been sold without a grape supply contract for a price indicated by the selling agent to be between $4.0M and $6.0M. The price has not been confirmed however we believe it to be at or close to $ 5.0M with settlement scheduled after the coming harvest in May 2011. Overall the property is considered to be well managed and enjoy a solid production reputation. However the sale price in our opinion is not considered to be truly reflective of market values for contracted vineyards, having effectively achieved a value equivalent to land and water. Indeed on our calculations should a buyer be able to be found for the fruit produced on this property at district average prices then a single year’s potential gross grape sale revenue would exceed the value paid for the property.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 27
Elderslie & Graces Vineyards- Wrattonbully SA
These two non adjoining vineyards are located approximately 15 km south east and east of Naracoorte in the Wrattonbully GI and were purchased in one line. Both properties contain commercial irrigated vineyards which appear to have been well managed. Soils on both properties generally comprise red and brown sandy loams over a clay base. Water for irrigation purposes is sourced from bores situated on the property. Building improvements include an office and meeting room, machinery shed, chemical shed and amenities.
Sale Particulars
Sale Date September 2010 Water Details Bores – 64.9 ha IE (combined) Sale Amount $2,100,000 Irrigation Method Drip irrigation Vendor Constellation Geographic Indication Wrattonbully Purchaser Casella Grape Supply Agreements Nil Property Area (ha) 185.22 Vineyard Trellising Treated pine ends and intermediate posts. Vineyard Area (ha) 153.50 Vineyard Age 2006 to 2008
Roadways and Headlands (ha) 31.72
Analysis
Rate per Hectare Overall $11,338
Rate per Hectare Vines $11,500
Rate per Hectare Roadways and headlands $4,000
Structural Improvements $200,000
Water $6,000 per hectare IE
Price Ratio 0.70
Varietal Composition
Comments
The properties were sold as part of a large portfolio of vineyards that were surplus to Constellation Wine’s requirements. The properties were purportedly sold without a grape supply contract to a wine company (Casella). The price reported above includes water which our enquiries indicate achieved in the order of $6,000 per hectare IE. Overall the property is considered to be well managed and presented. However the sale price in our opinion is not considered to be truly reflective of market values for contracted vineyards, having effectively achieved a value marginally above land, buildings and water. We are aware of other properties acquired by the Casella Group where the purchase price was calculated as a multiple of the anticipated net income from the vines based on a two year pay-back, such is the strength that buyers have in the current market.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 28
Gales & Tolleys Vineyard- Allotment 1 & 2 Riddoch Highway, Padthaway SA
This vineyard is located approximately eight kilometres south of Padthaway and 37 kilometres north of Naracoorte. The property was largely developed in the mid 1990’s by Mildara Blass and appears to have been well managed. Soils on the property generally comprise loams over a clay base. Water for irrigation purposes is sourced from two bores situated on the property. Building improvements include an office and meeting room, machinery shed, chemical shed and amenities.
Sale Particulars
Sale Date October 2009 Water Details Bores – 140.3 mega litres
Sale Amount $1,150,000 Irrigation Method Drip irrigation
Vendor Fosters Geographic Indication Padthaway
Purchaser Private Grape Supply Agreements 570 tonnes to Fosters
Property Area (ha) 88.00 Vineyard Trellising Treated pine ends and intermediate posts.
Vineyard Area (ha) 80.72 Vineyard Age 1987 to 1997
Roadways and Headlands (ha) 7.28
Analysis Varietal Composition
Rate per Hectare Overall $14,247
Rate per Hectare Vines $13,486
Rate per Hectare Roadways and $5,000 headlands
Structural Improvements $20,000
Price Ratio 1.14
Comments
The property was sold as part of a large portfolio of vineyards that were surplus to Fosters current requirements. The property was sold with a five year grape supply contract for a total of 570 tonnes of mixed grade fruit. The past five year historical vineyard production averages at a rate in the order of 802 tonnes equating to an average surplus in the order of 232 tonnes on an annual basis. Overall the property is considered to be well managed however the sale price in our opinion is not considered to be truly reflective of market values for contracted vineyards, with it being more in line with what we might expect for uncontracted properties.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 29
Garrett’s Vineyard- Allotment 7 Riddoch Highway, Padthaway SA
This vineyard is located approximately two kilometres south of Padthaway and 43 kilometres north of Naracoorte. The property was largely developed in the mid 1980’s and mid 1990’s by Mildara Blass and appears to have been well managed. Soils on the property generally comprise loams over a clay base. Water for irrigation purposes is sourced from a bore situated on the property. Building improvements include frost fans, machinery shed, chemical shed and pump shed.
Sale Particulars
Sale Date 23/11/2009 Water Details Bores – 124.6 mega litres
Sale Amount $800,000 Irrigation Method Drip irrigation
Vendor Fosters Geographic Indication Padthaway
Purchaser Private Grape Supply Agreements 195 tonnes to Fosters
Property Area (ha) 88.00 Vineyard Trellising Treated pine ends and intermediate posts.
Vineyard Area (ha) 71.90 Vineyard Age 1982 to 1997
Roadways and Headlands (ha) 5.85
Analysis Varietal Composition
Rate per Hectare Overall $10,289
Rate per Hectare Vines $10,372
Rate per Hectare Roadways and $5,000 headlands
Structural Improvements $25,000
Price Ratio 0.89
Comments
The property was sold as part of a large portfolio of vineyards that were surplus to Fosters current requirements. The property was sold with a five year grape supply contract for the Sauvignon Blanc and Shiraz plantings for a total of 195 tonnes of mixed grade fruit. The remainder of the varieties are uncontracted. The past five year historical vineyard production averages at a rate in the order of 853.6 tonnes across the whole property. Overall the property is considered to be well managed however the sale price in our opinion is not considered to be truly reflective of market values for contracted vineyards, with it being more in line with what we might expect for uncontracted properties.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 30
Merlot Grove Vineyard- Allotment 70 Riddoch Highway, Padthaway SA
Merlot Grove vineyard is located at the southern end of the GI approximately seven kilometres south of the township of Padthaway. The property enjoys Highway frontage from its western boundary and road frontage to Hills Road from its southern boundary. The property is well suited to horticulture, with an extensive water licence transferring with the sale. Historically the property has been utilised for lucerne and phalaris production and livestock grazing. Approximately one third of the property has been clay spread and two thirds of the property can be flood irrigated.
We have been advised soils on the property vary from terra rossa over limestone to sandy loam over clay. Building improvements include a three bedroom, one bathroom double brick conventional style residence. Features of the residence consist of a slow combustion heater, air conditioner and informal living areas. Other site improvements include a machinery shed (132sqm approx) and a two stand raised board shearing shed.
Sale Particulars
Sale Date July 2008 Water Details Bores - Water Licence # 7048 (21.50haIE) Discussions with the selling agent advised water quality to be in the Sale Amount $1,200,000 vicinity of 1,500ppm. Vendor Private
Purchaser Oparina Pty Ltd Irrigation Method Drip irrigation
Property Area (ha) 83.00 Geographic Indication Padthaway
Vineyard Area (ha) 6.35 Grape Supply Sold with no GSA’s in place. Agreements
Flood irrigated Land (ha) 71.65 Vineyard Trellising Treated pine ends and intermediate posts. A low-set dripper wire is fitted with a single cordon wire, with the Surplus Water (HaIE’s) 21.50 trellising configured to be mechanically pruned and Roadways and Headlands (ha) 5.00 harvested.
Vineyard Age 1997 to 2001
Analysis Varietal Composition
Rate per Hectare Overall $14,458
Rate per Hectare Vines $50,000
Rate per Hectare Flood irrigation land $7,500
Rate per Hectare Roadways and $5,000 headlands
Rate per HaIE of assessed excess water $7,500
Structural Improvements $185,000
Price Ratio 7.14
Comments
The sale property is not solely a vineyard operation, however does give an indication of what was paid for the vineyard based on the components of the property. We have been advised the purchaser owned a vineyard in close proximity to the subject holding and was going to utilise the excess water to shandy water on their vineyard. Analysis of the sale indicates vineyard prices ranged across varieties from $45,000 for the Chardonnay and $50,000 per hectare for the Merlot. The vendors ran the property as an organic certified vineyard.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 31
Sales Conclusion
In determining an unencumbered vacant possession value for the subject property we are of the opinion that the aforementioned sales evidence is of limited use due to the un-contracted or limited contract status of the vineyards offered, the volume presented at one time and the highly motivated mindset of the vendors involved.
Historically vineyards throughout the Limestone Coast region have transacted at rates between $60,000 and $80,000 per hectare with variances a consequence of location and fruit quality. We are of the opinion that good quality contracted vineyards within this region have come back to rates ranging from $30,000 to $50,000 per hectare as a consequence of the current oversupply situation.
Despite the aforementioned the only sale within the region that supports this is the sale of Merlot Grove vineyard which sold to an adjoining owner at a rate in the order of $50,000 per hectare for a property with no grape supply agreement in place. This transaction occurred in 2008. All of the of the subsequent sales are associated with the corporate sell-off in the region. With a very large number of assets offered and buyers reluctant to commit without the security of strong grape supply agreements, prices have collapsed. As a consequence of this balance sheet driven activity, vendors have had to basically make properties so cheap that neighbours and other industry participants are compelled to act. We strongly hold the view that such sales are therefore indicative of highly motivated, over-eager sellers rather than willing buyer-willing seller activity.
In determining a vacant possession value for the subject property we have had regard for the vineyards relatively high yielding qualities together with its standing within the Pernod Ricard Group, and its imputed contract to a recognised wine producer. We have also considered the high level of structural improvements and amenity, the configuration of the vineyards, their well kept and presented status and their large scale.
On a rate per hectare basis we feel that the majority of plantings on the subject property generally fall within the range of $40,000 to $50,000 per hectare with variances a consequence of varietal demand, prices and tonnages. Our assessment has resulted in an average in the order of $43,375 per hectare - a rate which is above the documented sales evidence however in line with our expected parameters over a longer term time horizon.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 32
14 FINANCIAL DETAILS
14.1 INCOME
The current annualised income for the 2010/2011 financial year is $1,774,859. It should be noted that this figure has been provided by Challenger Listed Investments Limited.
Recently negotiated rents for similarly leased horticultural properties generally range from 9% to 10% of current vacant possession value with variances largely a consequence of the percentage of arable land and the rental rates that can be afforded by that crop type. The current passing rental equates to approximately 22.75% of vacant possession value or $8,639 per hectare of total site area ($10,550 per hectare of planted area) which we feel is well above market parameters.
It is our understanding that a long term lessee of viticultural properties throughout most regions has recently had negotiations with one of its landlords to reduce rental rates to more favourable terms as current rates have become unaffordable.
The table below outlines a cross section of leases that are currently paid in the horticulture and viticultural industries.
Lessor Lessee Passing Rent Rate/ha of plantable Approximate % area (estimate only) of value
Orchard Funds Management MSWL $1,993,215 $3,962 15.95%
Tower Trust Fosters Group $1,092,492 $4,224 10.92%
Orchard Funds Management Select Harvest Ltd $827,169 $4,055 10.00%
Orchard Funds Management Select Harvest Ltd $1,605,376 $3,964 9.00%
The first lease is for a warm climate viticultural property with the lease negotiated in 2004, the second is for a viticultural property in the MIA area that was re-leased to Fosters in 2007 after the previous tenant went into financial administration. The other two leases are for almond properties located within the Euston area and these were negotiated in 2007.
14.2 OUTGOINGS
The Lease is a triple net lease where the lessee is liable for all outgoings
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 33
15 VALUATION METHODOLOGY
15.1 VACANT POSSESSION VALUE
In order to determine the likely market rent for the subject vineyard we need to calculate its probable market value on a vacant possession basis. In determining the vacant possession value of the subject property in this instance we have deemed it appropriate to utilise a combination of the direct comparison and summation method of valuation.
We have drawn our estimates of the market value of the vineyard based on the market evidence described in this report together with our opinion and perception of market activities, to which we have then added what we consider to be appropriate values for the structural improvements and the balance of the land, to determine an overall market value of the subject property. We regard this method as being consistent with that likely to be engaged by purchasers in the market place.
In determining a vacant possession value we have made the assumption that the fruit produced on the property would be saleable under contract at district average prices.
In addition we have made the assumption that there will be enough water available in the growing season to achieve the historical yields.
Below are the summary valuation calculations for the subject property. Detailed calculation schedules are set out within the appendices at the rear of this report.
Vineyard Plantings 168.22 ha. x $43,375/ha $ 7,296,500
Roadways, headlands and other land 37.23 ha x $5,000/ha $ 186,151
Structural Improvements $ 300,000
Total $ 7,782,651
Total (Rounded) $ 7,800,000
15.2 ENCUMBERED VALUE
In determining the current market value of the property on an encumbered (leased) basis we have examined the available market evidence together with alternative forms of investment and applied this analysis to both the traditional capitalisation approach (reversionary and initial yield basis) and the discounted cashflow approach. These approaches have in turn been checked by the direct comparison approach, analysed on a rate per hectare of land area.
15.3 CAPITALISATION APPROACH
The central premise of this approach is that the adopted capitalisation rate is derived from the yields indicated by sales of similar leased agricultural property investments. There has been a distinct lack of yield evidence derived from comparable sales as the majority of agricultural properties do not sell on a leased basis.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 34
In determining an appropriate reversionary or market yield we have had regard to returns from other classes of property investment. We summarise returns from various property asset classes as follows:
CBD Office buildings – Prime 7.50% to 10.00% CBD Office buildings – Secondary 9.50% to 10.50% Industrial – Prime 8.25% to 10.00% Industrial – Secondary 10.50% to 12.00% Retail – Neighbourhood 7.00% to 10.00%
In relation to comparisons with other forms of agricultural investment there is evidence that supports yields in the order of 7.50% to 10.00% however this is for small parcels of land that are utilised mainly for cereal cropping purposes and not comparable in terms of size, use or affordability to the subject.
The capitalisation of net income approach has been undertaken by applying a yield to both the potential fully let passing net income (initial yield) and the potential reversionary net income (reversionary yield). To the value derived, adjustments have been made for any relevant rental reversions including letting up allowances, incentives, leasing fees, capital expenditure and other appropriate capital allowances.
Detailed below are the definitions of yields used in our assessment of the valuation for the subject property:
Passing Initial Yield The net passing income for the property divided by the sale price or the adopted value.
Equivalent Initial Yield The net passing income for the property plus the market income across any vacancies, divided by the sale price or the adopted value.
Equivalent Reversionary Yield The assessed net market income divided by the sum of the sale price or the adopted value plus any capital adjustments to the core value such as letting up allowances, capital expenditure and present value of reversions.
We have adopted a core capitalisation rate of 10.50% after taking into consideration the location of the property, flexibility of the holding as a result of two separate allotments and the water security and end use of product. In addition we have had regard for the ability of the tenant to pay the current level of rent together with how we believe the market would view an investment of this nature.
It is our opinion that the current passing rent of $1,774,859 which equates to 22.75% of the vacant possession value is in excess of reasonable acceptable market parameters. In determining the market yield we have had regard for the ability of the tenant to pay the current level of rent together with how we believe the market would view an investment of this nature.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 35
REVERSIONARY YIELD BASIS (Market Rents)
Vineyard $741,000
Market Income $741,000
Add Recoverable Outgoings $0
Total Gross Market Income $741,000
Less Outgoings $0.00 per ha $0
Net Market Income $741,000
Less Vacancy Allowance 0.00% $0
Net Income $741,000
Capitalised at 10.250% 10.500% 10.750%
Capitalised Value $7,229,268 $7,057,143 $6,893,023
Capital Value Adjustments
PV Rental Shortfall / (Overage) ($2,281,732) ($2,275,338) ($2,268,983)
Total Adjustments ($2,281,732) ($2,275,338) ($2,268,983)
Assessed Capital Value as at 31 December 2010 $9,511,001 $9,332,481 $9,162,006
Rounded Reversionary Capitalisation Value $9,300,000
15.4 DISCOUNTED CASHFLOW APPROACH
We have also determined the market value of the subject property through the use of DCF analysis. The DCF approach involves the discounting of the net cash flow on a monthly basis over the assumed cash flow period at an appropriate rate to reflect risk to derive a market value. The net cash flow comprises the cash inflows less the cash outflows over the cash flow period, with the addition of the terminal value in the final cash flow period.
Cash inflows comprise income from the property adjusted to reflect actual rental income, speculative rental income and rental growth, whilst cash outflows comprise outgoings adjusted to reflect anticipated inflation, lease incentives and leasing and marketing fees. The terminal value is determined by the capitalisation of the imputed net market income in the month after the final cash flow period with allowances for any relevant capital adjustments.
The projected income stream reflects the anticipated growth, or otherwise, inherent in a property investment based upon the physical, tenancy or market characteristics related to that property. In addition to projected outgoings and allowances, future capital expenditure is reflected in the cash flow.
The future values quoted for property, rents and costs are projections only formed on the basis of information currently available to us and are not representations of what the value of the property will be as at a future date. This information includes the current expectations as to property values and income that may not prove to be accurate.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 36
Having regard to the above factors we have prepared a 10 year cash flow projection for the subject property in which we have assumed that the property is sold at the commencement of the eleventh year of the cash flow. The cash flow has been prepared based upon the following assumptions.
Growth Rates
The growth rates adopted for the cash flow period are as follows:
Vineyard Vineyard Vineyard Vineyard (Net Other (Gross Inflation Year Commencing (Gross Statutories Operational (Gross Face) (Net Face) Effective) Face) (CPI) Effective)
2011 0.00% 0.00% 0.00% 0.00% 3.26% 3.26% 4.26% 4.26%
2012 0.00% 0.00% 0.00% 0.00% 2.79% 2.79% 3.79% 3.79%
2013 2.54% 2.54% 2.54% 2.54% 2.54% 2.54% 3.54% 3.54%
2014 2.66% 2.66% 2.66% 2.66% 2.66% 2.66% 3.66% 3.66%
2015 2.80% 2.80% 2.80% 2.80% 2.80% 2.80% 3.80% 3.80%
2016 2.59% 2.59% 2.59% 2.59% 2.59% 2.59% 3.59% 3.59%
2017 2.27% 2.27% 2.27% 2.27% 2.27% 2.27% 3.27% 3.27%
2018 2.57% 2.57% 2.57% 2.57% 2.57% 2.57% 3.57% 3.57%
2019 2.81% 2.81% 2.81% 2.81% 2.81% 2.81% 3.81% 3.81%
2020 2.70% 2.70% 2.70% 2.70% 2.70% 2.70% 3.70% 3.70%
2021 2.70% 2.70% 2.70% 2.70% 2.70% 2.70% 3.70% 3.70%
Compounded 2.09% 2.09% 2.09% 2.09% 2.70% 2.70% 3.70% 3.70% 10 Years
1st 5 Years 1.59% 1.59% 1.59% 1.59% 2.81% 2.81% 3.81% 3.81% Compounded
2nd 5 Years 2.59% 2.59% 2.59% 2.59% 2.59% 2.59% 3.59% 3.59% Compounded
The inflation expectations are based upon our opinions and Access Economics Projections.
Terminal Value
An inherent assumption in the DCF is that the property is sold on the open market at the end of Year 10 of the cash flow. In determining the terminal yield we have given consideration to forecast market trends, the perceived marketability of the property at the terminal date and assumptions regarding income and capital expenditure of the property through our cash flow horizon. The terminal capitalisation rate is then applied to the net operating income in the 11th year which we have then discounted back to the date of valuation.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 37
Terminal Capitalisation Rate 10.750%
Relationship of Terminal Yield to Reversionary Yield +25.00 basis points
Gross Terminal Value $8,399,375
Net Terminal Value $8,260,786
Terminal Initial Yield 10.36%
Terminal Reversionary Yield 10.75%
Capital Value $40,883 ha
Acquisition and Disposal Costs
Acquisition Costs Disposal Costs
Legal Fees 0.10% Legal Fees 0.10%
Due Diligence 0.00% Agents Fees 1.50%
Stamp Duty 5.50% Marketing Costs 0.05%
Other 0.00% Other 0.00%
Total 5.60% Total 1.65%
In determining an appropriate discount rate we have had regard to internal rates of return from other classes of property investment. We summarise returns from various property asset classes as follows:
CBD Office 9.00% to 10.00% Industrial 9.00% to 10.50% Retail 9.00% to 10.00%
This compares with owner occupied agricultural operations, with returns summarised as follows:
Piggeries 12.00% to 14.00% Broilers 12.00% to 15.00% Dairies 14.00% to 16.00%
We consider that the risk associated with the cashflow of a horticultural or viticultural investment property of this nature is more akin to the specialised agricultural assets as listed above. We have therefore adopted a discount rate of 11.50% for the subject property
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 38
Discounted Cashflow Summary
The discounted cash flow analysis is summarised in the following table.
Year Commencing Jan-2011 Jan-2012 Jan-2013 Jan-2014 Jan-2015 Jan-2016 Jan-2017 Jan-2018 Jan-2019 Jan-2020
Vineyard $1,781,515 $1,794,876 $1,275,966 $755,977 $767,317 $778,826 $808,226 $838,067 $850,638 $863,397
Total Income $1,781,515 $1,794,876 $1,275,966 $755,977 $767,317 $778,826 $808,226 $838,067 $850,638 $863,397
Outgoings $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Vacancy Allowance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Income Before $1,781,515 $1,794,876 $1,275,966 $755,977 $767,317 $778,826 $808,226 $838,067 $850,638 $863,397 Capital Expenditure
Capital Expenditure $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 (Budgeted & General)
Agents Fees $0 $0 $45,021 $0 $0 $0 $49,910 $0 $0 $0
Other Adjustments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Income After Capital $1,781,515 $1,794,876 $1,230,945 $755,977 $767,317 $778,826 $758,316 $838,067 $850,638 $863,397 Expenditure
Terminal Value $8,399,375
Disposal Costs ($138,590)
Net Cash Flow $1,781,515 $1,794,876 $1,230,945 $755,977 $767,317 $778,826 $758,316 $838,067 $850,638 $9,124,183
Adopted Value @ $9,300,000 11.500%
Acquisition Costs $520,800
Adopted Value before $9,820,800 Acquisition Costs
Running Yield - Before 19.16% 19.30% 13.72% 8.13% 8.25% 8.37% 8.69% 9.01% 9.15% 9.28% Capex & Adjustments
Running Yield - After 19.16% 19.30% 13.24% 8.13% 8.25% 8.37% 8.15% 9.01% 9.15% 9.28% Capex & Adjustments
Running Yield - Before
Capex & incl. 19.16% 19.30% 13.24% 8.13% 8.25% 8.37% 8.15% 9.01% 9.15% 9.28% Adjustments
Running Yield - After Capex, Adjustments & 18.14% 18.28% 12.53% 7.70% 7.81% 7.93% 7.72% 8.53% 8.66% 8.79% incl. Acquisition Costs
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 39
Discounted Cashflow Conclusions
DCF Outputs
Discounted Terminal Value $2,778,972
NPV of Cash Flows $6,996,951
Sum of Discounted Cash Flows $9,775,922
Less Acquisition Costs ($518,420)
Net Present Value $9,257,502
Rounded DCF Value $9,300,000
15.5 VALUATION CONCLUSIONS
Valuation Approach Valuation Figure
Initial Yield Approach $9,300,000
Reversionary Yield Approach $9,300,000
Discounted Cash Flow Approach $9,300,000
Adopted Value $9,300,000
Our adopted value of $9,300,000 reflects the following:
Passing Initial Yield 19.08%
Equivalent Initial Yield 19.08%
Equivalent Reversionary Yield 10.55%
Internal Rate of Return (including capital expenditure) 11.40%
Internal Rate of Return (excluding capital expenditure) 11.40%
Direct Comparison $45,266 ha
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 40
16 ADDITIONAL REQUESTS
16.1 REASONABLE SELLING PERIOD
Due to the depressed state of the current vineyard market, it is our opinion the reasonable selling period for the property in the order of six to eight months. Despite this we are unable to predict future market conditions and as such, you should not assume this assessment of selling period would remain unchanged should market conditions alter.
16.2 PROBABLE PURCHASER GROUPS
In our opinion, the most likely purchaser of the subject property would be from the following groups:
• Institutional or syndicate(s) of investors seeking an income producing investment, or • Existing wine industry players seeking a facility within the region.
16.3 VALUATION CERTIFICATE
As requested we have supplied a valuation certificate compliant with the Hong Kong Stock Exchange’s Regulatory Requirements. This certificate may be included in the Major Transaction Circular to be dispatched to the shareholders of CKLS on or before 31 December 2010.
A copy of the Certificate is attached at Appendix G.
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 41
17 VALUATION
We assign the following value to the subject property as at 31 December 2010 and subject to the existing leases, comments, terms, conditions and assumptions contained within and annexed to our report, in fee simple and assuming the property is free of encumbrances, restrictions or other impediments of an onerous nature which would affect value:
On an Encumbered Basis $9,300,000– GST Exclusive (NINE MILLION THREE HUNDRED THOUSAND DOLLARS)
Vacant Possession Basis $7,800,000– GST Exclusive (SEVEN MILLION EIGHT HUNDRED THOUSAND DOLLARS)
Finally, and in accordance with our normal practice, we confirm that this report is confidential to Regenal Investments Pty Limited for major transaction purposes. No responsibility is accepted to any third party and neither the whole of the report or any part or reference thereto may be published in any document, statement or circular nor in any communication with third parties without our prior written approval of the form and context in which it will appear.
Colliers International Consultancy and Valuation Pty Limited
Alex Thamm, AAPI Certified Practising Valuer B Bus Prop (Val) 14 December 2010 (Date of Signing Report)
Regenal Investments Pty Limited Lawsons Vineyard, Riddoch Highway, Padthaway, SA 31 December 2010 42
APPENDIX A CICV Standard Terms of Business Colliers International Consultancy and Valuation Pty Limited Terms and Conditions
IT IS AGREED AS FOLLOWS: 5.2. If You do not provide Us with a survey, We will estimate building and/or lettable areas based only upon available 1. DEFINITIONS secondary information (including but not limited to building plans, Deposited Plans, and our own check measurements). means information that: ‘Confidential information’ Such estimates do not provide the same degree of accuracy or certainty as would be provided by a survey prepared by an (a) Is by its nature confidential; appropriately qualified professional in accordance with the (b) Is designated by Us as confidential; (c) You know or ought to know is confidential; Property Council of Australia (PCA) Method of Measurement. (d) and includes, without limitation: 5.3. Where such a survey is subsequently produced which differs (i) Information comprised in or relating to any of Our intellectual from the areas estimated then You will refer the valuation or property in the Services or any reports or certificates provided consultancy advice back to Us for comment or, where as part of the Services; and appropriate, amendment. (ii) The Quotation annexed hereto.
‘Currency Date’ means, in relation to any valuation or consultancy 6. OTHER ASSUMPTIONS report, the date as at which our professional opinion is stated to be 6.1. Unless otherwise notified by You, We will assume: current. (a) there are no easements, mortgages, leases, encumbrances, ‘Fee’ means the amount agreed to be paid for the Services as set out in covenants, caveats, rights of way or encroachments except the Quotation. those shown on the Title; and (b) all licences and permits can be renewed and We will not make ‘Parties’ means You or Us as the context dictates. any enquiries in this regard. ‘Quotation’ means the written quote provided by Us in relation to the Services. 6.2. Where third party expert or specialist information or reports are provided to Us or obtained by Us in connection with the ‘Services’ means the valuation or consultancy services provided pursuant to these Terms and Conditions and the Quotation, and includes Services (including but not limited to surveys, quantity any documents, reports or certificates provided by Us in connection with surveyors reports, environmental audits, structural/dilapidation the services. reports), We will rely upon the apparent expertise of such experts/specialists. We will not verify the accuracy of such ‘We’, ‘Us’, ‘Our’ means Colliers International Consultancy and Valuation information or reports. Pty Limited (ABN 88 076 848 112). 7. VALUATION FOR FIRST MORTGAGE SECURITY ‘You’, ‘Your’ means the entity engaging Us to perform the Services as set out in the Quotation. 7.1. Where the Services are provided for mortgage purposes, You agree that You will not use the valuation or consultancy report where the property is used as security other than by first 2. PERFORMANCE OF SERVICES registered mortgage. 2.1. We will provide the Services in accordance with: 7.2. We reserve the right, at Our absolute discretion, to determine (a) The Terms and Conditions contained herein; and whether or not to assign Our valuation to any third party. (b) The required provisions of the current Australian Property Without limiting the extent of Our discretion, We may decline a Institute Professional Practice standard. request for assignment where:
3. CONDITION OF THE PROPERTY (a) the proposed assignee is not a major recognised lending institution (such as a major bank); 3.1. In undertaking the Services We will have regard to the (b) the assignment is sought in excess of 3 months after the date apparent state of repair, condition and environmental factors of valuation; in relation to the property based upon a visual inspection, but (c) We consider that there has been a change in conditions which We will not (and are not qualified to) carry out a structural, may have a material impact on the value of the property; geotechnical or environmental survey. We will not inspect (d) the proposed assignee seeks to use the valuation for an those parts of the property that are unexposed or inaccessible. inappropriate purpose (including in a manner inconsistent with Your agreement at clause 7.1); or 3.2. We will assume that there is no timber infestation, asbestos or (e) Our Fee has not been paid in full. any other defect (unless advised otherwise) and that the property is compliant with all relevant environmental laws. It is 7.3. Where We decline to provide an assignment on either of the Your responsibility to provide reports to Us that are relevant to bases at 7.2(b) or (c), We may be prepared to provide an these issues. updated valuation on terms to be agreed at that time.
3.3. We will not undertake a detailed inspection of any plant and 7.4. In the event that You request us to assign Our valuation and equipment or obtain advice on its condition or suitability. We agree to do so, You authorise Us to provide to the assignee a copy of these Terms and Conditions, the Quotation 3.4. We recommend that You engage appropriately qualified and any other document, including instructions provided by persons to undertake investigations excluded from the You, relevant to the scope of Our Services. Services.
3.5. No responsibility will be accepted either to You or to any third 8. ESTIMATED SELLING PRICE party for loss or damage that may result directly or indirectly 8.1. Where You instruct Us to provide an Estimated Selling Price, from the condition of the property. You agree that the Services:
4. ENVIRONMENT AND PLANNING (a) are limited to the provision of a opinion based upon Our knowledge of the market and informal enquiries. 4.1. We will obtain only verbal town planning information. It is Your (b) We are not required to carry out a full inspection of the responsibility to check the accuracy of this information by property; any inspection of comparable properties; a search obtaining a certificate under the appropriate legislation. on Title(s) or other enquiries as to encumbrances, restrictions or impediments on Title(s); or other investigations which would 4.2. State or Federal Laws may require environmental audits to be be required for a formal valuation. undertaken before there is a change of land use. You will (c) provide an indicative figure only which is not suitable for use provide such audits to Us where they are required. We will for any purpose other than as general information or guide as not advise You whether such audits are required or obtain to sale expectations. It is not suitable to be relied upon for the such audits. If You do not provide Us with such audits We will purpose of entry into any transaction. perform the Services on the assumption that such audits are not required. 8.2. No responsibility will be accepted either to You or to any third party for loss or damage that may result from the issue of such 5. BUILDING AREAS AND LETTABLE AREAS an Estimated Selling Price. 5.1. Where a survey is provided to Us for consideration, We will assume that information contained in the survey is accurate and has been prepared in accordance with the Property Council of Australia (PCA) Method of Measurement. Colliers International Consultancy and Valuation Pty Limited Terms and Conditions
9. CURRENCY OF VALUATION 12. CONFIDENTIALITY 9.1. Due to possible changes in market forces and circumstances 12.1. You must not disclose or make any of the Confidential in relation to the subject property the Services can only be Information available to another person without Our written regarded as relevant as at the Currency Date. consent.
9.2. Where You rely upon Our valuation or consultancy report after 12.2. If consent to disclose the Confidential Information is provided the Currency Date, You accept the risks associated with by Us, You agree to abide by any additional terms and market movement between the Currency Date and the date of conditions that We may apply to that disclosure. such reliance. 13. PRIVACY 9.3. Without limiting the generality of 9.2, You should not rely upon Our valuation or consultancy report: 13.1. We may obtain personal information about You in the course of performing Our Services. We respect Your privacy. The (a) after the expiry of 3 months from the Currency Date; Privacy Amendment (Private Sector) Act, 2001 requires Us to (b) where circumstances have occurred during that period which advise You that we will only obtain information that is may have a material effect on the value of the property or the necessary to assist us in the course of performing Our assumptions or methodology used in the valuation or Services. If it is necessary for Us to engage third parties, we consultancy report. will inform these parties that they are not to disclose any personal information about You to any person or organisation other than Us. 10. MARKET PROJECTIONS 10.1. Any market projections incorporated within our Services A copy of Our Privacy Policy can be obtained by contacting including, but not limited to, income, expenditure, associated Our Chief Privacy Officer. growth rates, interest rates, incentives, yields and costs are projections only, and may prove to be inaccurate. Accordingly, such market projections should be interpreted as 14. SUBCONTRACTING an indicative assessment of potentialities only, as opposed to 14.1. We may subcontract or otherwise arrange for another person certainties. to perform any part of the Services or to discharge any of Our obligations under any part of these Terms and Conditions, 10.2. Where Our Services include market projections such with Your consent. projections require the dependence upon a host of variables that are highly sensitive to varying conditions. Accordingly, variation in any of these conditions may significantly affect 15. LIABILITY these market projections. 15.1. You agree to release Us and hold Us harmless from all liability to You for or in respect of any loss, damage, costs and 10.3. Where market projections form part of Our Services, We draw expenses of whatsoever kind which we have or may have or, your attention to the fact that there will be a number of but for the operation of this Clause, might have had arising variables within acceptable market parameters that could be from or in any way connected with the Services or the use of pertinent to Our Services and the projections adopted are the Services or any part of them. This release shall be representative of only one of these acceptable parameters. complete and unconditional except in the case of gross negligence or wilful misconduct by Us in the provision of the 11. YOUR OBLIGATIONS Services. 11.1. You warrant that the instructions and subsequent information 15.2. You agree that You will fully indemnify Us for and in respect of supplied by You contain a full and frank disclosure of all all loss, liability, costs and expenses of whatsoever kind which information that is relevant to Our provision of the Services. We may suffer or incur arising from or in any way connected with any breach by You of Clause 11 or Clause 12. This 11.2. You warrant that all third party expert or specialist reports indemnity shall include but not be limited to loss, liability, costs provided to Us by You for the purpose of Us providing the and expenses which we may suffer or incur in respect of any Services are provided with the authority of the authors of claims, actions, proceedings, disputes or allegations made those reports. against Us or to which we are a party.
11.3. You authorise and licence us to incorporate Your intellectual property within our report(s). 16. ENTIRE AGREEMENT 16.1. No further agreement, amendment or modification of these 11.4. You will not release any part of Our valuation or consultancy Terms and Conditions shall be valid or binding unless made in report or its substance to any third party without Our written writing and executed on behalf of the Parties by their duly consent. Such consent will be provided at Our absolute authorised officers. discretion and on such conditions as We may require including that a copy of these Terms and Conditions be provided to 16.2. If there is an inconsistency between these Terms and such third party. This clause shall not apply to persons noted Conditions and the Quotation, any letter of instruction from as recipients in Your prior instruction to Us or in the Quotation You, or other specific request or information, the other specific provided that You shall provide any such recipient with a copy request or information shall prevail to the extent of the of these Terms and Conditions. inconsistency.
11.5. If You release any part of the valuation or consultancy advice or its substance with our written consent, You agree: a) to inform the other person of the terms of our consent; and b) to compensate Us if You do not do so. We have no responsibility to any other person even if that person suffers damage as a result of any other person receiving this valuation or consultancy advice.
11.6. You must pay our Fees within 14 days of the date of a correctly rendered invoice. Fees that remain unpaid for a period of 30 days or more will attract an administration charge of 2% of the total of the invoice calculated per month or part thereof.
11.7. We reserve the right to reconsider or amend the valuation or consultancy advice, or the Fee set out in our Quotation to You if:
(a) Certificates, surveys, leases, side agreements or related documentation that were not provided to Us prior to the provision of the Services are subsequently provided, and contain matters that may affect the value of the advice; or (b) Where subsequent site inspections made in relation to any of the matters raised in clause 3 materially affect or may alter the value of the property the subject of the Services. APPENDIX B Letter of Instruction
APPENDIX C Title Search REGISTER SEARCH OF CERTIFICATE OF TITLE * VOLUME 5203 FOLIO 92 *
COST : $18.70 (GST exempt ) PARENT TITLE : CT 5162/417 REGION : EMAIL AUTHORITY : TG 7731494 AGENT : COLL BOX NO : 193 DATE OF ISSUE : 25/07/1994 SEARCHED ON : 01/11/2010 AT : 12:18:32 EDITION : 10 CLIENT REF AT/VALS-VADEL3554
REGISTERED PROPRIETOR IN FEE SIMPLE ------CHALLENGER LISTED INVESTMENTS LTD. OF LEVEL 1/212 PIRIE STREET ADELAIDE SA 5000
DESCRIPTION OF LAND ------ALLOTMENT 9 FILED PLAN 105665 IN THE AREA NAMED PADTHAWAY HUNDRED OF GLEN ROY
EASEMENTS ------SUBJECT TO THE EASEMENT OVER THE LAND MARKED A TO THE ELECTRICITY TRUST OF SOUTH AUSTRALIA (TG 7731494)
SCHEDULE OF ENDORSEMENTS ------9791788 MORTGAGE TO AUSTRALIA & NEW ZEALAND BANKING GROUP LTD.
10517216 CAVEAT BY PERNOD RICARD PACIFIC PTY. LTD.
10517218 LEASE TO PERNOD RICARD PACIFIC PTY. LTD. COMMENCING ON 1.7.2006 AND EXPIRING ON 30.6.2013
NOTATIONS ------DOCUMENTS AFFECTING THIS TITLE ------NIL
REGISTRAR-GENERAL'S NOTES ------AMENDMENT TO DIAGRAM VIDE 14/1997
END OF TEXT.
Page 1 of 2 5203 92 01/11/2010 12:18:32
Page 2 of 2 REGISTER SEARCH OF CERTIFICATE OF TITLE * VOLUME 5249 FOLIO 918 *
COST : $18.70 (GST exempt ) PARENT TITLE : CT 3936/193 REGION : EMAIL AUTHORITY : CONVERTED TITLE AGENT : COLL BOX NO : 193 DATE OF ISSUE : 23/02/1995 SEARCHED ON : 01/11/2010 AT : 12:18:13 EDITION : 10 CLIENT REF AT/VALS-VADEL3554
REGISTERED PROPRIETOR IN FEE SIMPLE ------CHALLENGER LISTED INVESTMENTS LTD. OF LEVEL 1/212 PIRIE STREET ADELAIDE SA 5000
DESCRIPTION OF LAND ------ALLOTMENT 5 FILED PLAN 137765 IN THE AREA NAMED PADTHAWAY HUNDRED OF GLEN ROY
EASEMENTS ------NIL
SCHEDULE OF ENDORSEMENTS ------9791788 MORTGAGE TO AUSTRALIA & NEW ZEALAND BANKING GROUP LTD.
10517216 CAVEAT BY PERNOD RICARD PACIFIC PTY. LTD.
10517218 LEASE TO PERNOD RICARD PACIFIC PTY. LTD. COMMENCING ON 1.7.2006 AND EXPIRING ON 30.6.2013
NOTATIONS ------DOCUMENTS AFFECTING THIS TITLE ------NIL
REGISTRAR-GENERAL'S NOTES ------AMENDMENT TO DIAGRAM VIDE 14/1997
END OF TEXT.
Page 1 of 2 5249 918 01/11/2010 12:18:13
Page 2 of 2 REGISTER SEARCH OF CERTIFICATE OF TITLE * VOLUME 5249 FOLIO 919 *
COST : $18.70 (GST exempt ) PARENT TITLE : CT 3936/194 REGION : EMAIL AUTHORITY : CONVERTED TITLE AGENT : COLL BOX NO : 193 DATE OF ISSUE : 23/02/1995 SEARCHED ON : 01/11/2010 AT : 12:17:53 EDITION : 8 CLIENT REF AT/VALS-VADEL3554
REGISTERED PROPRIETOR IN FEE SIMPLE ------CHALLENGER LISTED INVESTMENTS LTD. OF LEVEL 1/212 PIRIE STREET ADELAIDE SA 5000
DESCRIPTION OF LAND ------ALLOTMENT 4 FILED PLAN 137764 IN THE AREA NAMED PADTHAWAY HUNDRED OF GLEN ROY
EASEMENTS ------NIL
SCHEDULE OF ENDORSEMENTS ------9791788 MORTGAGE TO AUSTRALIA & NEW ZEALAND BANKING GROUP LTD.
10517216 CAVEAT BY PERNOD RICARD PACIFIC PTY. LTD.
10517218 LEASE TO PERNOD RICARD PACIFIC PTY. LTD. COMMENCING ON 1.7.2006 AND EXPIRING ON 30.6.2013
NOTATIONS ------DOCUMENTS AFFECTING THIS TITLE ------NIL
REGISTRAR-GENERAL'S NOTES ------AMENDMENT TO DIAGRAM VIDE 14/1997
END OF TEXT.
Page 1 of 2 5249 919 01/11/2010 12:17:53
Page 2 of 2 APPENDIX D Town Planning Guidelines D.C. SOUTHERN MALLEE
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COORONG D.C.
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STATE OF VICTORIA
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T A C E D N S A P
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NARACOORTE LUCINDALE DC
Note: See Index Map Tat/2 for shaded areas Scale 1:550000 Note: For policy areas see Maps Tat/37 to Tat/39 0 40km TATIARA (D.C.) Con Conservation PIn Primary Industry ZONES Zone Boundary Development Plan Boundary MAP Tat/3
Consolidated - 4 February 2010 121 Tatiara (DC)
PRIMARY INDUSTRY ZONE
Introduction
The objectives and principles of development control that follow apply to that part of the Tatiara District Council referred to as the Primary Industry Zone shown on Maps Tat/3 to 36. Additional objectives and principles of development control also apply to the relevant policy area. They are additional to those expressed for the whole of the Council area. To the extent of any inconsistency between the zone provisions and those provisions applying to the Council area, the zone provisions will prevail.
The Primary Industry Zone contains the Abattoir Policy Area, shown on Maps Tat/37, 38 and 39.
OBJECTIVES
General
Objective 1: The long-term sustainability of primary industries.
Objective 2: The long-term protection of agricultural land from incompatible land use.
Objective 3: Prevention of pest plant invasion and effective management of existing pest plant problems.
Water
Objective 4: Protection of the supply and quality of water resources and the maintenance of natural hydrological systems and environmental flows.
Noise
Objective 5: Prevention or minimisation of adverse impacts resulting from noise.
Built Form and Design
Objective 6: Buildings and structures which are compatible with the environmental qualities, built form and character of the surrounding area and landscape, and which minimise the potential for impact from rural based activities.
Land Division
Objective 7: Allotments of a size and configuration which:
(a) take account of environmental features, existing development, site constraints and the availability of infrastructure;
(b) promote the efficient use of rural land for primary industry; and
(c) discourage land uses that are incompatible with primary industry.
Dwellings
Objective 8: New residential development only where:
(a) there is a demonstrated ongoing connection with primary production which can be sustained in the long term; and
(b) the use of a residence will not compromise the continuation of primary production within the zone.
Consolidated - 4 February 2010 122 Tatiara (DC)
Rural Based Industrial Development
Objective 9: Development of industries which have a direct association with primary industries and which are sited and designed so as to not have an adverse impact on primary industries and the character and amenity of the locality.
PRINCIPLES OF DEVELOPMENT CONTROL
General
1 Development should occur in a manner which will not have an adverse impact on the natural, physical, chemical or biological quality and characteristics of soil resources.
2 Development of more intensive forms of primary production should only be undertaken where:
(a) water of sufficient quantity and quality is available to sustain the proposed use;
(b) the soil structure and land capability classification is appropriate to the proposed use;
(c) the proposed use will be compatible with adjacent existing and anticipated uses of adjacent land, and with the purpose of the Primary Industry Zone;
(d) adverse impacts on downstream property owners, in terms of water flow and discharge of pollutants, can be avoided;
(e) there will not be a risk of the water table either falling or rising significantly because of excessive irrigation; and
(f) all new allotments have frontage to a constructed, all weather public road, or where an all weather public road does not exist, the road is upgraded to provide all weather access to each allotment at no cost to the Council.
3 Development adjacent the Conservation Zone should:
(a) avoid disturbance, unnecessary loss or damage to biodiversity, particularly threatened species and threatened ecological communities;
(b) not give rise to pest plant or disease infestation of areas of native vegetation;
(c) not give rise to increased numbers of cats, dogs and pest animals; and
(d) use locally indigenous species in all landscaping and revegetation programs.
Water
4 Buildings and any modifications to the landform should not be located closer than 50 metres to a watercourse identified on Fig Tat/2.
5 The quality of water leaving a site should be of a physical, chemical and biological condition equivalent to or better than the pre-development characteristics.
6 Development should not increase the volume of water leaving a site.
7 Stormwater from buildings and ground areas should be managed so as to maximise the potential for stormwater harvesting and reuse, and to minimise the impact on natural draining systems by:
(a) preventing soil erosion or siltation;
(b) minimising the entry of pollutants; and
(c) mitigating peak flows.
Consolidated - 4 February 2010 123 Tatiara (DC)
Flooding
8 Development should only take place where:
(a) it is not likely to be adversely affected by flooding, and there is an acceptable risk from flooding to life or property;
(b) it will not increase the risk of flooding of other land; and
(c) it will not obstruct or interfere with watercourses.
9 Structures, including fencing and the filling of land, should only occur where they will not impede the flow of floodwaters or change the pattern of floodwater movement.
10 Structures, including fencing (other than post and wire fencing) and the filling of land should not take place within 50 metres to a watercourse identified on Fig Tat/2.
Air Quality
11 The emission of odours, or other airborne particles, should not cause environmental nuisance or harm external to the site of a proposal.
12 The minimum fixed separation distances between a primary industry and other land uses, activities or landscape elements should be in accordance with the requirements of Table Tat/5.
13 Where a minimum separation distance (as established in Table Tat/5) cannot be achieved between agricultural land uses involving chemical spraying and sensitive uses, a vegetated buffer should be established between the agricultural and sensitive uses which has:
(a) a minimum total width of 40 metres;
(b) random planting of a variety of tree and shrub species of differing growth habits, at spacings of 4 to 5 metres for a minimum width of 20 metres;
(c) species with long, thin and rough foliage to facilitate the more efficient capture of spray droplets;
(d) a permeable barrier which allows air to pass through the buffer. A porosity of 0.5 is acceptable (approximately 50 percent of the screen should be air space);
(e) foliage which is from the plant’s base to the crown;
(f) species which are fast growing and hardy;
(g) a mature tree height 1.5 times the spray release height or target vegetation height, whichever is higher;
(h) mature height and width dimensions which do not detrimentally impact upon adjacent cropped land; and
(i) an area of at least 10 metres clear of vegetation or other flammable material to either side of the vegetated area.
Noise
14 Primary industries which generate noise should be adequately separated from nearby noise sensitive land uses, or acoustically treated to ensure that noise from the industry does not significantly increase the existing noise environment or exceed the levels indicated in the Environment Protection (Noise) Policy.
15 The operation of any audible bird scaring device or combination of devices should not result in unreasonable interference to neighbouring residents.
Consolidated - 4 February 2010 124 Tatiara (DC)
16 Audible bird scaring devices should be operated in accordance with the following:
(a) be used as part of an integrated bird scaring strategy;
(b) be used predominantly between 7.00 am and 8.00 pm;
(c) noise from any audible bird scaring devices used before 7.00 am or after 8.00 pm must not exceed a noise level of 45 dB(A);
(d) the maximum frequency for discharge (number of firings) of gas guns is six per hour emanating from any area of 10 hectares or less on any one property (two firings in quick succession of the gas gun count for only one shot for the purposes of complying with the six sounds an hour criteria);
(e) multiple devices should have a synchronised firing pattern;
(f) gas guns are not used closer than 300 metres to a noise sensitive receiver that is not associated with the property on which the gas gun is used. This distance may be reduced if the proponent can show that the gas gun is permanently set up such that the maximum level of the explosions does not exceed 100 dB (Lin Peak) measured at any noise sensitive receiver not associated with the property on which the gas gun is used;
(g) gas guns are not used closer than 500 metres to a noise sensitive receiver located within a Residential, Country Township or Rural Living Zone;
(h) the maximum impulse noise level generated as part of an integrated bird scaring strategy by firing of gas guns is an accumulated peak level (APL) of 118dB within a primary production area;
(i) the maximum impulse noise level generated as part of an integrated bird scaring strategy by firing of gas guns is an accumulated peak level (APL) of 115dB within a primary production area that adjoins a residential area;
(j) a gas gun is positioned such that it minimises the impact to noise sensitive receivers, and where the device is not directed towards the nearest noise sensitive receiver, depending on the location of other receivers and the local topography between the device and the receiver;
(k) the maximum equivalent noise level generated as part of integrated bird scaring strategy by electronic/speaker noise is 57 dB(A) within a primary production area; and
(l) the maximum equivalent noise level generated as part of an integrated bird scaring strategy by electronic/speaker noise is 52 dB(A) within a primary production area that adjoins a residential area.
Built Form and Design
17 Buildings should be set-back a minimum of 50 metres from every public road, other than adjacent to the Dukes Highway and the Riddoch Highway where the set-back should be a minimum of 100 metres.
18 Buildings and structures should:
(a) be designed, sited and of a scale and appearance to enhance the positive environmental qualities, built form and character of the locality;
(b) where practicable, be located in unobtrusive locations and screened from public roads and adjoining properties by:
(i) natural landforms;
(ii) existing vegetation; or
(iii) the planting of appropriate species of locally indigenous vegetation.
Consolidated - 4 February 2010 125 Tatiara (DC)
(c) involve minimal excavation or filling of land;
(d) not necessitate the removal of existing vegetation; and
(e) be grouped together.
19 The external materials of buildings and structures which are visible from public roads or nearby dwellings should have:
(a) a low reflective finish; and
(b) colours which are consistent with the colours of the natural rural landscape within the locality to minimise their visual obtrusiveness.
20 The external form and appearance of buildings and structures which are visible from public roads or nearby dwellings should:
(a) consist of a low profile;
(b) comprise of smaller components by variations in wall and roof lines; and
(c) include eaves, verandahs and other similar design techniques to create shadowed areas,
to minimise their visual obtrusiveness.
Land Division
21 Land should not be divided into allotments smaller than 40 hectares unless:
(a) no additional allotments are created and the use of those allotments is in accordance with the zone objectives; or
(b) an owner of land wishes to create a separate allotment to contain one of two habitable dwellings on the land, both of which were built or under construction before 18 February 1999 where:
(i) the allotments have a minimum size of 1.0 hectare and a maximum size of 3.0 hectares;
(ii) the allotment sizes are satisfactory to meet the minimum separation distance in accordance with Table Tat/5;
(iii) the allotment shall adequately accommodate a landscape buffer of a minimum width of 20 metres along all boundaries including the road frontage if the dwelling is not set-back 100 metres. The buffer shall be densely vegetated with locally indigenous species;
(iv) the allotments have frontage to a public road and each dwelling has safe and convenient access to an all weather public road;
(v) the allotment that does not accommodate the dwelling to be excised if less than 40 hectares, shall wherever practicable be amalgamated with an adjoining primary production allotment;
(vi) each building must have been erected initially as a dwelling (or approved uses as a dwelling) and not erected for any other purpose. The newer of the dwellings should not have been constructed for the purpose of replacing the older dwelling;
(vii) each dwelling has or can satisfactorily be provided with an adequate and reliable on-site water storage system and connected to a suitably designed and constructed effluent disposal system;
Consolidated - 4 February 2010 126 Tatiara (DC)
(viii) the current Valuer General’s records must indicate that more than one dwelling exists on the property and Council records must not indicate that the use of those dwellings has changed; and
(ix) the additional allotment is unlikely to limit or prejudice the present or future use of the subject or adjoining land for primary production; or
(c) where the division is for the purpose of creating only one additional allotment of approximately 1.0 hectare in size (not including the driveway), to be used to accommodate buildings and facilities involved with the processing, display and sale of locally grown produce; or
(d) the division is for the purpose of facilitating more intensive forms of primary production, and provided the proposed allotment or allotments are not less than 10.0 hectares in size and where:
(i) water, of sufficient quantity and quality is available to sustain the proposed use;
(ii) the soil structure and land capability classification is appropriate to the proposed use;
(iii) the proposed use will be compatible with existing and anticipated uses of adjacent land, and with the purpose of the Primary Industry Zone;
(iv) adverse impacts on downstream property owners, in terms of water flow and discharge of pollutants, can be avoided;
(v) there will not be a risk of the watertable either falling or rising significantly because of excessive irrigation; and
(e) all new allotments have frontage to a constructed, all weather public road, or where an all weather public road does not exist, the road is upgraded to provide all weather access to each allotment at no cost or a cost share arrangement with the Council.
22 Allotments should be of a size and configuration which:
(a) take account of environmental features and site constraints;
(b) provide sufficient space in appropriate locations for the siting of buildings, structures and associated services and infrastructure; and
(c) can satisfactorily accommodate land use consistent with the site’s land capability and the purpose of the Primary Industry Zone.
Dwellings
23 A dwelling should only be established where:
(a) its location is unlikely to limit or prejudice the present or future use of the subject or adjoining land for primary production;
(b) the dwelling will not give rise to demands for additional or improved infrastructure and services than those which already exist;
(c) the dwelling is able to be equipped with an adequate and reliable water supply which has a storage capacity equivalent to 15 000 litres per bedroom;
(d) the dwelling is able to be connected to a suitably designed effluent disposal system;
(e) the dwelling is sited to allow safe and convenient access to an all weather public road; and
(f) no other dwelling exists on the site.
Consolidated - 4 February 2010 127 Tatiara (DC)
24 A second dwelling shall only be erected on any allotment if:
(a) the allotment forms part of an operating farm;
(b) the additional dwelling is to accommodate a farm employee or seasonal worker(s) employed in primary production in the region;
(c) the proposed dwelling is located within reasonable proximity to the existing dwelling and can be connected to the same services as the existing dwelling; and
(d) would not result in the subsequent division of the allotment.
25 Dwellings should not be established on allotments created in accordance with Zone Principle 22(d) unless:
(a) the allotment is used for horticultural production and is at least 20 hectares in area;
(b) the divided allotment has been continually used for horticultural purposes for a period of not less than 12 months;
(c) the dwelling and any associated development, including driveways, is located so as not to prejudice the use of the allotment for horticultural production; and
(d) the planning authority is satisfied that the development will not give rise to demands for additional urban services.
Workers Accommodation
26 Accommodation for seasonal workers should only be established in rural areas if it:
(a) is to accommodate farm employees or seasonal worker(s) employed in primary production in the region;
(b) is to be established on a site which has a minimum area of not less than 20 hectares; and
(c) is associated with specific service infrastructure (gas, electricity, water, effluent disposal, telecommunications and roads) or short term construction projects.
27 Accommodation for seasonal workers, excluding temporary workers camps or depots, should:
(a) be limited to a maximum floor area of 300 square metres;
(b) accommodate not more than 20 persons;
(c) be located at least 50 metres from the road boundary other than adjacent to the Dukes Highway and the Riddoch Highway where the set-back should be a minimum of 100 metres; and
(d) be located at least 30 metres from any property boundary other than the road boundary.
28 Accommodation for seasonal workers in rural areas should maintain the natural character and beauty of such areas, by
(a) utilising existing vegetation where possible as a screen for the development;
(b) locating buildings in discrete clusters amongst existing dwellings and farm buildings;
(c) ensuring that the development has minimal visual impact on views from main roads, predominant tourist destinations, or areas of conservation significance;
(d) ensuring that development sites are rehabilitated within one month of the development approval having expired for temporary forms of workers accommodation; and
Consolidated - 4 February 2010 128 Tatiara (DC)
(e) utilising building materials and colours that blend with the natural rural landscape.
Rural Based Industrial Development
29 Industrial and/or commercial development, excluding development in the Abattoir Policy Area, should only occur where it involves the repair and maintenance of farm equipment, or the processing, packing, fermentation, storage, wholesaling or retailing of primary produce and where:
(a) no detriment or nuisance to owners or occupiers of land in the locality of the development would be likely to arise;
(b) the development would not cause traffic problems and has appropriate all weather access;
(c) there is no disfigurement of the land’s appearance or detriment to the use and character of rural land in the surrounding locality;
(d) the development in question has an association with its rural surroundings land uses;
(e) any area used for retail sales does not exceed 10 percent of the building area or maximum of 300 square metres and has a direct association with the approved land use of the property;
(f) the development cannot be accommodated within appropriately zoned locations;
(g) it can be designed, located and landscaped to minimise its visual impact; and
(h) stormwater is directed from paved areas into landscape plantings.
Intensive Animal Keeping
30 All intensive animal keeping operations and their various components, including holding yards, temporary feeding areas, movement lanes, and solid and liquid waste treatment facilities should be located no closer than 100 metres to any watercourse identified on Fig Tat/2.
31 Surface run-off from uncovered areas where animals are kept in an intensive manner should be contained within a controlled drainage area and directed to appropriately designed holding/evaporation ponds.
32 Intensive animal keeping operations and their various components (including piggeries, poultry sheds and cattle feedlots, but excluding dairies, land-based aquaculture, stables and horse keeping) should not be located:
(a) within a 2.0 kilometre radius of any Residential Zone in Bordertown, Keith, Mundulla, Wolseley, Padthaway or Willalooka townships;
(c) within a 1.0 kilometre radius of any Rural Living Zone or the Water Protection Zone;
(d) within 100 metres of a dwelling occupied by persons involved with the intensive animal keeping operations; or
(e) within 1000 metres of a dwelling occupied by persons not involved with the intensive animal keeping operation.
Land-based Aquaculture
33 Land based aquaculture ponds should be designed and constructed to:
(a) incorporate a free-board, flood diversion and overflow outlets which are capable of coping with a 1-in-25 year rainfall event;
Consolidated - 4 February 2010 129 Tatiara (DC)
(b) prevent pond leakage from entering any groundwater resource, and incorporate a minimum buffer of one metre between the bottom of the pond and the watertable;
(c) not be located within the 1-in-100 year floodplain of a watercourse as defined by a blue line on a current 1:50 000 SA Government topographic map;
(d) prevent any wastewater entering any watercourse or body; and
(e) prevent the escape of culture stock.
Olive Orchards and Irrigated Horticulture
34 Olive orchards should be located a minimum of 500 metres from any Conservation Zone.
35 Irrigated horticulture operations (except olive orchards) should be located a minimum of 50 metres from the edge of stands of remnant native vegetation greater than 5.0 hectares in area.
36 Development should occur in a manner which does not:
(a) increase the potential for, or result in, the spread of proclaimed pest plants or other non-indigenous plants; and
(b) result in the degradation of remnant native vegetation by any other means including as a result of spray drift, compaction of soil, modification of surface water flows, pollution to groundwater or surface water or changes to groundwater levels.
Commercial Forestry
37 Forestry plantations occur on land of a slope not exceeding 20 degrees, and:
(a) retain a 5.0 metre vegetated buffer strip adjacent to a wetland area, cave or surface water discharge areas or a watercourse as defined by a blue line on a current 1:50 000 SA Government topographical map;
(b) do not involve cultivation in drainage lines or within 20 metres of a wetland area, cave or surface water discharge area or a watercourse as defined by a blue line on a current 1:50 000 SA Government topographical map;
(c) do not involve the application of ground-based fertilisers or herbicides within 20 metres of the high water mark or the aerial application of fertiliser within 200 metres of the high water mark of a watercourse as defined by a blue line on a current 1:50 000 SA Government topographical map; and
(d) artificial drainage lines (ie culverts, run-offs and constructed drains) minimise concentrated water flows onto plantation areas, and are integrated into natural drainage lines.
Tourism Facilities
38 Tourism developments in rural areas should ensure that:
(a) agricultural activities are maintained as the predominant land use in the region; and
(b) do not detrimentally impact on the existing land use.
39 Tourism development should not be located in agricultural areas where it could prejudice agricultural productivity generally by limiting the application of land management techniques reasonably required to sustain agricultural production.
40 Tourism developments, where proposed to be located in proximity to rural industry and seasonal activities should be designed and sited to reduce the potential for disturbance or disruption to the tourist activity and should be located in a manner which is compatible with surrounding uses.
Consolidated - 4 February 2010 130 Tatiara (DC)
41 Tourist facilities should be in the form of cellar door sales, retail outlets for local produce, restaurants, interpretative centres and facilities, and:
(a) promote local produce;
(b) be associated with primary production, value adding industry or other approved activity of the locality, or areas of environmental significance;
(c) designed and sited to complement their rural setting; and
(d) not have a detrimental impact on primary production or areas of environmental significance.
42 Tourist accommodation should be small in scale, for a maximum of twelve persons and primarily in the form of bed and breakfast establishments, guesthouses, boutique hotels, farm stays, rural retreats and health retreats, and where in all circumstances:
(a) the facilities have a functional and/or location requirement linked with agricultural production or processing carried out from the land;
(b) the facilities are designed and sited to complement their rural setting; and
(c) are in harmony with the character, form, scale and external materials of construction of surrounding buildings.
Advertisements
43 Advertisements (other than those advertisements listed as non-complying in the Primary Industry Zone) should conform with the standards and guidelines set out in Table Tat/2, and should in all circumstances be non-illuminated, small in scale, and incorporate clear and simple type faces.
Grain Bulk Handling Facilities
44 Development within 300 metres of facilities for the transportation, handling and storage of farm commodities in bulk, should not prejudice the continued operation of those facilities.
45 Development within 300 metres of facilities for the transportation, handling and storage of farm commodities in bulk, should be designed, sited and developed having regard to the potential environmental impacts arising from the operation of the bulk transportation, handling and storage facilities.
46 Development in the zone should be sensitive to the need for bulk handling storage and transport facilities to be subjected to extended operation during the grain harvest.
47 Development of facilities for the handling, transportation and storage of farm commodities in bulk should have:
(a) adequate areas set aside on the site of the development for the marshalling of vehicles attending the site;
(b) adequate areas set aside on the site of the development for storage and loading of any containerised farm produce;
(c) roadways and parking areas surfaced in a manner sufficient to have dust emission from the site reduced to a level appropriate to the locality;
(d) landscaping established around the perimeter and within the site for the purpose of providing shade and shelter and to assist with screening and dust filtration;
(e) vehicle circulation between elements on the site restricted to the site of the development; and
(f) materials and finishes appropriate to the locality of the development.
Consolidated - 4 February 2010 131 Tatiara (DC)
48 Development should not take place if there is potential for significant conflict with the establishment or operation of those facilities required for the handling, storage and transportation of farm commodities in bulk.
Complying Development
49 Those kinds of development listed in Table Tat/3, together with the following kinds of development, are complying in the Primary Industry Zone:
Farming
Farm Buildings that:
(a) are sited more than 100 metres from any public road or allotment boundary;
(b) have a total floor area of 500 square metres or less;
(c) have exterior cladding consisting of new materials; and
(d) are used wholly or partly for the purpose of farming or horticulture.
Horse keeping where:
(a) it is more than 50 metres from a dwelling on another property;
(b) stables, horse yards and associated facilities are more than 8.0 metres from a dwelling on the same property;
(c) adequate fly-proof manure and waste receptacles are provided;
(d) adequate dust suppression techniques are employed; and
(e) any day yards are a maximum size of 8.0 metres x 5.0 metres and have masonry walls or other appropriate materials not less than 2.0 metres in height.
Non-complying Development
50 The following kinds of development are non-complying in the Primary Industry Zone:
Advertisements located within 500 metres of the centre-line of any Primary Arterial Road or Secondary Arterial Road as designated on Map Tat/1 (Overlay 1) other than where:
(a) the advertisement has an advertisement area of 2.0 square metres or less, with the exception of an advertisement associated with a vineyard or winery, where the advertisement area shall not exceed 6.0 square metres;
(b) the message depicted on the advertisement relates entirely to a lawful use being conducted from the same site as the advertisement;
(c) the advertisement is erected on the same site as the use or activity to which it relates; and
(d) not more than two advertisements are erected per allotment.
Amusement Hall Amusement Machine Centre Builder’s Yard Caravan Park Dwelling on an allotment which was created after 18 February 1999, other than where the dwelling is to be erected:
(a) on an allotment which is 20 hectares or more in area; or
(b) on an allotment which has been created by way of boundary realignment only, where no additional allotments are created.
Consolidated - 4 February 2010 132 Tatiara (DC)
General Industry, except for an organic waste processing facility where:
(a) an impervious leachate barrier is provided between the operational areas and the underlying soil and groundwater of an organic waste processing operation proposed to be located on a site that is wholly or partly within a water protection area;
(b) the proposed organic waste processing operation is located on a site with ground slopes no greater than 6 percent;
(c) the proposed organic waste processing operation is located a minimum distance of 100 metres from any dam, river, creek, natural watercourse, channel or bore and not within the area of a 1 in 100 year flood event;
(d) the proposed organic waste processing operation is located on land with a depth to subsurface seasonal tidal or permanent groundwater of 2.0 metres or greater;
(e) the land to be used for the organic waste processing operation is at least a distance of 500 metres from the nearest sensitive receptor; or
(f) the proposed organic waste processing operation employs an in-vessel or fully enclosed composting system where a lesser distance to the nearest sensitive receptor may be appropriate.
Hotel Junk Yard Land Division for an allotment less than 20 hectares associated with a dwelling constructed after 4 November 2004.
Landfill, except where:
(a) other than on the site of a disused quarry, the proposed landfill is located on a site with ground slopes of no greater than 10 percent;
(b) the land to be used for the deposition of the landfill and the operation of the waste handling facilities is at least a distance of 500 metres from the boundaries of the landfill site;
(c) the proposed landfill operation is located a minimum of three kilometres from the boundary of any airport used by commercial aircraft;
(d) the proposed landfill operation is located a minimum distance of 100 metres from any creek, river, inlet, wetland or marine estuarine area and not within the area of a 1-in-100- year flood event; and
(e) the interface between any engineered landfill liner and the natural soil is:
(i) greater than 15 metres from unconfined aquifers bearing ground water with a water quality of less than 3000 milligrams per litre of total dissolved salts;
(ii) greater than five metres from groundwater with a water quality between 3000 milligrams per litre of total dissolved salts and 12 000 milligrams per litre of total dissolved salts; or
(iii) greater than two metres from groundwater with a water quality exceeding 12 000 milligrams per litre of total dissolved salts.
Motel, excluding those directly associated with existing cellar door sales, retail outlets for local produce, restaurants, interpretative centres and facilities Olive orchard within 500 metres of a Conservation Zone Petrol Filling Station Retail Showroom with a total floor area greater than 300 square metres
Consolidated - 4 February 2010 133 Tatiara (DC)
Road Transport Terminal other than a road transport terminal involved in the bulk handling of farm commodities produced from or associated with the same property upon which the road transport terminal is located Roadside Stall Service Trade Premises
Shop except where:
(a) developed for cellar door or sale of local produce ancillary to an existing approved land use, where the total floor area does not exceed 10 percent of the building area or maximum of 300 square metres; or
(b) developed as a restaurant primarily serving the needs of travellers or visitors and ancillary to an existing approved land use producing or selling local produce, and where the dining area does not exceed 300 square metres or a total seating capacity of 100;
Stadium Vehicle and machinery display and sales Warehouse Welfare Institution
Public Notification
51 Those kinds of development listed in Table Tat/4, together with the following kinds of development, are assigned as Category 1 Development in the Primary Industry Zone:
Alterations and additions to existing development, other than existing development in the nature of intensive animal keeping or any development listed as non-complying in the Primary Industry Zone Anemometer for a period not exceeding two years Any development within the Abattoir Policy Area that does not constitute a development of environmental or major environmental significance (Schedule 21 or 22 activities) Dwellings Facilities associated with the bulk receival, storage and dispatch of farm commodities including seed and grain cleaning facilities if they achieve a minimum separation distance of 300 metres from the nearest sensitive land use Farm Building Farming Horse Keeping Horticulture (excluding olive orchards)
52 The following kinds of development are assigned as Category 2 Development in the Primary Industry Zone:
Any development within the Abattoir Policy Area that constitutes a development of environmental or major environmental significance (Schedule 21 or 22 activities) Boarding house in accordance with Principle 28 Dairies Facilities associated with the bulk receival, storage and dispatch of farm commodities Hostel in accordance with Principle 28 Intensive Animal Keeping Land based aquaculture Multiple dwelling in accordance with Principle 28 Olive Orchards Processing, packing, storage, wholesaling and retail facilities associated with primary production other than in the circumstances described in Zone Principle 30 Road Transport Terminal if associated with the bulk receival, storage and dispatch of farm commodities Stock Slaughter Works Tourist accommodation for a maximum of 12 persons Wind Farm Wind Turbine
Consolidated - 4 February 2010 134 Tatiara (DC)
Abattoir Policy Area (Policy Area 2 and 5)
The following objectives and principles of development control relate to the Abattoir Policy Area shown on Maps Tat/37 and 38 and Figs Pln/1 and Pln/2. They are additional to those expressed for the Primary Industry Zone and the whole of the Council area.
OBJECTIVE
Objective 1: An area in which stock is received, kept, slaughtered, processed (including rendering) and dispatched.
The Policy Area relates to two existing meatworks in the Council area, namely the Tatiara Meatworks and Dalraida Bulk Meat.
Within the policy area, the two meatworks are large land holdings comprising stock holding yards, factories for meat processing and/or rendering, cropped paddocks and associated offices.
The Tatiara Meat Company abattoir is a significant existing secondary industry complementing the agricultural industry throughout the Upper South East. The meatworks has been established on the site since 1981 and at its peak capacity processes some 8500 head of livestock per day. Employing in excess of 380 people, the industry is the largest single employer within the district.
Development within and adjacent the policy area should address potential impacts from the abattoir activities. Improvements to environmental management of the activities are ongoing and should be further encouraged.
PRINCIPLES OF DEVELOPMENT CONTROL
1 Development within the policy area should be undertaken in accordance with the relevant Abattoir Concept Plan Figs Pln/1 and Pln/2.
2 Development within 500 metres of an existing building or land used for slaughter of stock or poultry, or keeping of stock or poultry prior to slaughter on-site, skin drying works or rendering plant should not prejudice the continued operation of those facilities.
3 Development within 300 metres of facilities for slaughter or keeping of stock or poultry, skin drying works or rendering plant, should be designed, sited and developed having regard to the potential environmental impact arising from the operation.
4 Development of facilities for the stock slaughter works, skin drying works or rendering plant, should have:
(a) principal access, manoeuvring and parking areas on the site shall have an all weather surface comprised of bitumen, asphalt, concrete or brick paving, all other access roads, manoeuvring, parking and storage areas shall be formed and surfaced so as to minimise the generation of dust;
(b) landscaping established around the perimeter and within the site for the purpose of providing shade and shelter and to assist with screening and dust filtration, to a minimum width of 15 metres;
(c) vehicle circulation between elements on the site restricted to the site of the development; and
(d) materials and finishes appropriate to the locality of the development.
5 There should be no open storage, or other uses of land located or carried on where such storage or use would present an untidy appearance as viewed from public roads and adjacent zones.
6 New buildings and structures should be set-back not less than 50 metres from Pigeon Flat Road and Meatworks Road.
7 New buildings and structures should be set-back not less than 50 metres from Dark Island Well Road.
Consolidated - 4 February 2010 2
Tatiara
Creek
4 3 1
300metre radius
E OAD LAT R ON F D PIGE
C
4 A MEATWORKS ROAD 300metre radius 4 B
Boundary of area affected by Concept plan Vehicular access 1 Abattoir site 2 Industry 3 Constructed wetlands 4 Primary Production Scale 1:20 000 Area of potential environmental impact 0 800metres A Abattoir Buildings & Rendering Plant B Effluent Ponds C Vegetation TATIARA (D.C.) D Skin Works & Dwelling ABATTOIR E Machinery Building BORDERTOWN CONCEPT PLAN FIGURE PIn/1
Consolidated - 4 February 2010 2
DARK ISLAND WELL ROAD
ROAD RESERVE
30 0m R ad 2 iu s
B 2 E D
A C 1 C
2
Boundary of area affected by concept plan Scale 1:10 000 Vehicular Access 0 500m Area of potential environmental impact 1 Abattoir Site TATIARA (D.C.) 2 Primary Production A Abattoir & Rendering Plant ABATTOIR B Effluent Ponds KEITH C Existing Vegetation CONCEPT PLAN D Workshop E Office Figure PIn/2 Landscape Buffer Consolidated - 4 February 2010 APPENDIX E Water Licence NRM Register Page 1 of 2
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NRM Register - Licence Search
Detail of Licence No - 7038-0
1. Licensee CHALLENGER LISTED INVESTMENTS LTD
2. Prescribed Water Resources The underground water to which a well in the Padthaway Prescribed Wells Area has access.
3. Management Area Padthaway Flats
4. Total Water Allocation per Annum Taking 0.0 haIE Taking 373,460 kL
5. Components of Allocation* Purpose Underground Taking Bridging 33,950 kL 30/06/2011 Volume Underground Taking Irrigation 0.0 haIE Underground Taking Irrigation 339,510 kL
6. SOURCE of WATER Resource Allocation Source Quantity Unit Purpose Expiry
Taking Bridging Underground PADTHAWAY PWA 33,950 kL 30/06/2011 Volume Underground PADTHAWAY PWA 0.0 haIE Taking Irrigation Underground PADTHAWAY PWA 339,510 kL Taking Irrigation *The Allocation currently displayed is the amount of water allocation after taking into account any water allocation transfers to or from the Licence and will vary as transfers are affected
7. Land on which water can be taken The water allocation(s) endorsed by the licence may only be used on the land described below:
CT 5249/918 Allotment 5 in Filed Plan 137765 Sections(s) Pt Sec 105 Hundred of Glen Roy
CT 5203/92 Allotment 9 in Filed Plan 105665 Sections(s) Pt Sec 112 Hundred of Glen Roy
CT 5249/919 Allotment 4 in Filed Plan 137764 Sections(s) Pt 105 Hundred of Glen Roy
8. Intrastate Water Allocation Transfer Details Click here to view
9. Interstate Water Allocation Transfer Details Click here to view
10. Conditions of Water Licence Click here to view
11. Notes of Water Licence Click here to view
TAKE NOTE
That the licensee, or a person acting on behalf of the licensee, who contravenes or fails to comply with a condition of this licence is guilty of an offence, and such acts or omissions may also result in cancellation, suspension or variation (including a reduction in the water allocation) of the licence by seven days written notice.
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NRM Register - Licence Conditions
Detail of Licence Number: 7038 0
1. The water allocation(s) endorsed on this licence must only be used on the land described below:
◦ CT 5249/918 Allotment 5 in Filed Plan 137765 Sections(s) Pt Sec 105 Hundred of Glen Roy
◦ CT 5203/92 Allotment 9 in Filed Plan 105665 Sections(s) Pt Sec 112 Hundred of Glen Roy
◦ CT 5249/919 Allotment 4 in Filed Plan 137764 Sections(s) Pt 105 Hundred of Glen Roy
2. The water allocation(s) endorsed on this licence must only be used for the purpose(s) described above.
3. The water allocation(s) endorsed on this licence must only be taken from the source(s) described above and where specified the amount of water taken from each source must not exceed the component of the allocation assigned to it.
4. For the purposes of this water licence, the term 'per annum' means the period between 1 July in any calendar year and 30 June in the following calendar year.
5. If the company name or name of licence holder(s) and/or the postal address of the licence holder(s) changes, then the licence holder(s) must notify this Department in writing within 21 days of the change occurring.
6. The licensee must complete an Annual Water Use Report for each water use year and submit that Report to the Minister at an address specified in the Report on or before the next 31 July after the end of the water use year to which the Report relates. In this condition an 'Annual Water Use Report' means a form produced and approved by the Minister.
7. As at 30 June 2005, the water allocation(s) endorsed on this water licence must not be used for wild flooding. In this condition 'wild flooding' means irrigation where no adequate system such as land levelling, or irrigation bays is used to ensure a controlled distribution of water.
8. The licensee must not take water except through the meter.
9. The licensee must not adjust or alter the meter without the Minister's authority.
10. The licensee must not damage or destroy a meter.
11. The licensee must not cut through or into a pipe, install a fitting providing access to the inside of a pipe, change the configuration of, remove, or interfere in any other way with, a pipe connecting the water resource from which water is taken to the meter and the pipe on the other side of the meter to (and including) the S bend in the pipe or, where there is no S bend, the first T junction or elbow in the pipe.
12. The water allocation endorsed on this water licence, per annum, must only be taken from the well units and through meters, endorsed on this licence.
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http://e -nrims.dwlbc.sa.gov.au/NRMRegister/Conditions.aspx?doctype=10&docdesc= ... 23/11/2010 APPENDIX F Valuation Calculations Colliers International Consultancy & Valuation Pty Limited Valuation Calculations Summary Lawsons Vineyard, Riddoch Highway, Padthaway SA
VALUATION DETAILS
Valuation Date 31 December 2010 Cash Flow Model Date 1 January 2011 Interest Valued Freehold Interest Purpose of Valuation Financial reporting
CORE VALUATION ASSUMPTIONS Financial Details Gross Passing Income (Fully Let) $1,774,859 Adopted Gross Market Income $741,000 Outgoings (pa) - Outgoings (pa) - Net Passing Income (Fully Let) $1,774,859 Adopted Net Market Income $741,000 Passing Income is $1,033,859 above current market levels
Total Hectares 205.45 ha Total Vacacny - Vineyard Ha 205.45 ha
Net Gross Average Passing Vineyard Rental* $8,639/ha $8,639/ha Average Market Vineyard Rental $3,607/ha $3,607/ha *Passing rental averages are based on the proportion of occupied area.
Global Assumptions Agents Leasing Fees (Gross) 12.00% Refurb Allowance - Initial Expiries $0/ha Renewal Leasing Fee (Gross) 6.00% Refurb Allowance - Secondary Expiries $0/ha Vacancy Allowance 0.00% Acquisition Costs 5.60% Disposal Costs 1.65% Vineyard Other Lease Term 4 years Lease Term 4 years Letting Up - Market 0 months Letting Up - Market 6 months Retention Probability (Letting Up & Leasing Fees) 100.0% Retention Probability (Letting Up & Leasing Fees) 0.0% Letting Up - Applied 0 months Letting Up - Applied 6 months Renewal Probability (Incentives) 100.0% Renewal Probability (Incentives) 100.0% Reviews CPI Capped at 1.50% Reviews -
Traditional Valuation Approach Discounted Cash Flow Approach Core Initial Capitalisation Rate 19.000% Cash Flow Term 10 years Core Reversionary Capitalisation Rate 10.500% Terminal Capitalisation Rate +25.00 bps 10.750% Pending Vacancies Allowances within 12 months Terminal Allowances & Reversions within 12 months Capital Expenditure Allowances for 12 months Discount Rate 11.500% Rental Reversions (PV) Current tenants at expiry/market review with 10 Yr Rental Growth Vineyard (Gross Face) 2.09% subsequent leases at 12 months (compounded) Vineyard (Net Face) 2.09%
VALUATION CONCLUSIONS Traditional Valuation Approach Discounted Cash Flow Approach Initial Yield Approach $9,300,000 Discounted Terminal Value 28% $2,778,972 Reversionary Yield Approach $9,300,000 NPV of Cash Flows 72% $6,996,951 Sum of Discounted Cash Flows $9,775,922 Less Acquisition Costs ($518,420) Net Present Value $9,257,502 Rounded DCF Value $9,300,000 ADOPTED VALUE
$9,300,000 - GST Exclusive (NINE MILLION THREE HUNDRED THOUSAND DOLLARS )
RESULTANT YIELDS AND IRR'S ON ADOPTED VALUE Direct Comparison $45,266 per Ha Terminal Initial Yield 10.36% Passing Initial Yield 19.08% Terminal Reversionary Yield 10.75% Equivalent Initial Yield 19.08% Terminal Capital Value $40,883 per Ha Equivalent Reversionary Yield 10.55% Rate of Increase in Capital Value -1.01% Average Lease Duration 2.50 years IRR (Incl. Capex) 11.40% Weighted Lease Duration by Area 2.50 years IRR (Excl. Capex) 11.40% Weighted Lease Duration by Income 2.50 years 3 Year IRR (incl. Capex) 8.68% Total Capital Expenditure (Nominal) $0 5 Year IRR (incl. Capex) 10.29% % of Adopted Value (Nominal) 0.00% 7 Year IRR (incl. Capex) 10.86% LAWSONS VINEYARD, PADTHAWAY VALUATION CALCULATIONS
Property: Valuation Summary 168.22 ha full bearing vines @ $43,375/ha$43,375 /ha $7,296,500 Valuation date 21-Oct-10 37.23Road ways & Headlands $5,000/ha $186,151 Title reference: CT 5203/925249/918 5249/919 205.45ha land & plantings $7,482,651 Total land area 205.45 ha Structural improvements $300,000 Vineyard 168.22ha Total $7,782,651 Plantable land 0.00 ha Market Value (Rounded) $7,800,000 Road ways, headlands & other land 37.23 ha P:GI Ratio 4.00 Water Water Licence no; 7038 339.51 Grape price Allow prices as shown
Variety Year planted Area (ha) Average Contribution to Value/ha Production / Value ha Cab Franc 1990 5.32 13.16 212,800 40,000 Cab Sauvignon 1 1989 3.18 5.84 159,000 50,000 Cab Sauvignon 2 1989 8.21 9.63 369,450 45,000 Cab Sauvignon 3 1990 16.13 7.29 725,850 45,000 Cab Sauvignon 4 1993 12.63 8.22 568,350 45,000 Shiraz 1 1968 2.78 7.20 139,000 50,000 Shiraz 2 1989 8.06 11.38 362,700 45,000 Shiraz 3 1991 9.39 8.58 422,550 45,000 Shiraz 4 1993 31.17 9.97 1,402,650 45,000 Shiraz 5 2005 15.47 8.50 696,150 45,000 Chardonnay 1 1989 16.60 22.48 581,000 35,000 Chardonnay 2 1991 11.06 15.82 387,100 35,000 Merlot 1 1991 10.50 12.27 472,500 45,000 Merlot 2 2005 12.4010.00 558,00045,000 Sauv Blanc 1990 5.32 15.91 239,400 45,000 Total area of mature vines 168.22 7,296,500 43,375
Road ways & headlands 37.23 ha @ $5,000/ha 186,151 Structural improvements 300,000 Estimated market value $7,800,000 $7,782,651
APPENDIX G Valuation Certificate
Level 10, Statewide House GPO Box 2243 Adelaide SA 5001 MAIN +61 8 8305 8888 99 Gawler Place www.colliers.com.au DIRECT +61 8 8305 8878 Adelaide SA 5000 FAX +61 8 8385 0278 MOB +61 409 595 415 EMAIL [email protected]
Ref: VADEL3637
14 December 2010
The Directors Regenal Investments Pty Limited c/- Thomsons Lawyers Level 25, 264 George Street SYDNEY NSW 2000
Dear Sirs
Subject Property: Lawsons Vineyard, Padthaway, South Australia, Australia
In accordance with the instructions from Regenal Investments Pty Limited (“the Company”) to value the property interests of CK Life Sciences Int’L (Holdings) Inc (CKLS), the “Target Company” in Australia, we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing the market value of such property interests as at 31 December 2010 (referred to as the “date of valuation”).
It is our understanding that this valuation is for major transaction purposes.
This valuation extract, which is an extract from our full valuation report, explains the basis and methodology of valuation, and clarifies our assumptions made, title investigation of properties and the limiting conditions. It has been prepared specifically for use by the Company and CKLS in meeting the disclosure requirements of CKLS to/with the Hong Kong Stock Exchange. However full particulars in relation to the valuation process are set forth in our full valuation report and this valuation extract should be read in conjunction with that document.
Basis of Valuation
The subject property in our opinion is likely to be regarded as a leased investment. Consequently, in adopting this definition of value we are of the opinion that it is consistent with the definition of Market Value defined by International Valuation Standards Committee (IVSC) and endorsed by the Australian Property Institute (API).
"Market Value” is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion."
Colliers International Consultancy and Valuation Pty Limited | ABN 88 076 848 112
This valuation extract is provided by Colliers International Consultancy & Valuation Pty Limited (CICV) and not by any other company in the Colliers International Group. This valuation extract has been prepared for major transaction purposes and should not be relied upon for any other purpose or by any person other than Regenal Investments Pty Limited. CICV accepts no responsibility for any statements in this report other than for the stated purpose. This valuation extract is issued on the basis that no liability attaches to the companies in the Colliers International Group other than CICV in relation to any statements contained in the valuation extract.
Date of Issue
In accordance with your written instructions dated 2 December 2010, our inspection of the subject property as at 26 October 2010 and the requested date of valuation as at 31 December 2010, we confirm that this valuation extract has been provided as at 31 December 2010 (Date of Valuation).
We have assumed that there will be no change to the property or the market between the date of issue and the date of valuation. Should we become aware of any relevant market information that may impact on the value of the property, up to and including 31 December 2010, we at our own discretion reserve the right to review and possibly amend the valuation analysis contained herein.
Qualification and Warning
CICV has been engaged by Regenal Investments Pty Limited to provide a valuation of Lawsons Vineyard, Padthaway, South Australia.
Regenal Investments Pty Limited and CKLS wish to include the valuation extract in the Major Transaction Circular of CKLS (the Circular) to the Hong Kong Stock Exchange and have requested CICV to consent to the inclusion of this valuation extract. CICV consents to the inclusion of this valuation extract in the Circular and to being named in the Circular, subject to the condition that Regenal Investment Pty Limited include this Qualification and Warning:-
i. This valuation extract has been prepared for Regenal Investment Pty Limited only and for the specific purposes outlined within the Instruction section of this report and cannot be relied upon by third parties. ii. This valuation extract is a summary of the valuations of the aforementioned properties as at 31 December 2010 and has not been prepared for the purpose of assessing the property as an investment opportunity. iii. CICV makes no representation or recommendation to a Recipient in relation to the valuation of the property or the investment opportunity contained in this valuation extract. iv. Recipients must seek their own advice in relation to the investment opportunity contained in this valuation extract.
2
v. The events of early 2008 including the initial sub-prime fallout in the United States and subsequent Global Financial Crisis (GFC) created uncertain times for both the equities and property markets in Australia which impacted to varying degrees upon a variety of market participants. The initial impact was focussed on the Listed Property Trust sector operating assets within the major commercial, industrial, retail and infrastructure sectors. While a degree of uncertainty still remains within these markets, the magnitude is notably less than that evident throughout 2008 and the majority of 2009. Improving levels of general market activity over recent times appears to have resulted in growing investor confidence, albeit shallower than that experienced prior to the GFC. The rural property market has typically lagged the experiences of the other major markets and traditionally has not displayed their volatility. However there have been some very substantial collapses within the managed investment scheme sector in particular that have dampened investor confidence. The very rapid tightening of credit availability that resulted from the GFC remains an issue within the Australian rural property market with LVR requirements causing a general pull back in many regional markets.
CICV has prepared this valuation extract on the basis of, and limited to, the financial and other information (including market information and third party information) referred to in the valuation extract and contained in the full valuation report. We have assumed that the third party information is accurate, reliable and complete and confirm that we have not tested the information in that respect.
Liability Disclaimer
In the case of advice provided in this valuation extract and our full valuation report which is of a projected nature, we must emphasise that specific assumptions have been made by us which appear realistic based upon current market perceptions. It follows that any one of our associated assumptions set out in the text of this valuation extract may be proved incorrect during the course of time and no responsibility can be accepted by us in this event.
This valuation extract has been prepared subject to the conditions referred to in our Qualification & Warning.
CICV has prepared this valuation extract which appears in the Circular. CICV were involved only in the preparation of this valuation extract and the valuation referred to herein, and specifically disclaim any liability to any person in the event of any omission from, or false or misleading statement included in the Circular, other than in respect of the valuation and this valuation extract. We confirm that this valuation extract may be published in the Circular.
The valuation is current as at the date of the valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period as a result of general market movements or factors specific to the particular property.
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We do not accept liability for losses arising from such subsequent changes in value. Without limiting the generality of the above comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of three months from the date of the valuation, or such earlier date if you become aware of any factors that have any effect on the valuation. CICV confirms that it does not have a pecuniary interest that would conflict with its valuation of the property.
Property Description
Address Lawsons Vineyard, Padthaway, South Australia
Brief Description The subject property comprises a total area of approximately 205.45 hectares of which approximately 168.22 hectares has been developed to irrigated vines in the period from 1968 through to 2005. The property is located within the Padthaway Geographic Indication and appears to have been developed to a high standard. Secondary improvements on the property include a residential dwelling together with associated shedding improvements in addition to vineyard and chemical shedding improvements. The property is held in three valuation extracts of title and is currently leased to Pernod Ricard Pacific Pty Ltd for a period of 7 years commencing on 1 July 2006 and expiring on 30 June 2013 together with three rights of renewal of four years each.
Zoning Primary Industry within the Tatiara District Council
Lessee Pernod Ricard Limited
Term 7 years
Rent $1,774,859 per annum
Lease Expiry Date 30 June 2013
Rent Review Annual at 0.75% until expiry
Option Three rights of renewal of four years each
Property Classification Investment
Certificate of Title
Title Details
Search Date 1 November 2010
Local Government Area Tatiara District Council
Area Padthaway
Hundred Glen Roy
Legal Description Folio Registered Proprietor Area
Allotment 4 within Filed Plan 137764 5249 / 919 Challenger Listed Investments Ltd 71.43 ha approx.
Allotment 5 within Filed Plan 137765 5249 / 918 Challenger Listed Investments Ltd 66.77 ha approx
Allotment 9 within Filed Plan 105665 5203 / 92 Challenger Listed Investments Ltd 67.25 ha approx
The combined area of the three titles is 205.45 hectares or thereabouts.
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Site Contamination
A visual site inspection in consideration of the past land uses has not revealed any obvious pollution or contamination.
The property has been used for viticultural purposes for many years. During these activities, chemicals in the form of fertilisers and sprays would have been applied to the land and fuel and oils stored on the land. These activities could have given rise to low level contamination similar to that found in the district and reflected in the prices paid generally for land in the area.
We are not aware of the fully details with regard to usage of the site prior to the current use, however, we have no cause to believe that the site has been contaminated.
We advise that we are not experts in the detection or quantification of any environmental problems, and accordingly have not carried out a detailed environmental investigation.
Therefore, this valuation is made on the assumption that there are no actual or potential contamination issues affecting: i) the value or marketability of the property; ii) the site.
Verification that the property is free from contamination and has not been affected by pollutants of any kind should be obtained from a suitably qualified environmental professional. Should subsequent investigation say that the site is contaminated, this valuation will require revision.
At the time of inspection there were no signs of visible site contamination. We are unaware of any past or proposed use of the land that could create potential liabilities under the environmental use protection legislation.
We have not been provided with an environmental audit report of this site.
Building Materials
We have not sighted any form of Asbestos Register in relation to the subject property.
Our site inspection did not reveal any obvious signs of asbestos products, however we cannot certify the site free of contamination.
We recommend that if the parties whom wish to rely on this report have any concerns in relation to potential asbestos contamination, they should request the owner to commission a survey and to prepare an Asbestos register.
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Building Condition and Utility
We are not aware of any notices currently issued against the property and we have made no enquiries in this regard. Expert opinion has not been sought in respect to the building structure or the plant and equipment, however our limited enquiries have not revealed any major defects. The improvements are considered to be in reasonable condition for their age.
We have assumed that the property complies with the appropriate statutory, building and fire safety regulations.
We have also assumed that there is no timber infestation, asbestos or other defect and have made no investigations for them nor have we undertaken a structural survey or tested the building services.
Valuation
We assign the following value to the subject property as at 31 December 2010 and subject to the existing leases, comments, terms, conditions and assumptions contained within and annexed to our report, in fee simple and assuming the property is free of encumbrances, restrictions or other impediments of an onerous nature which would affect value:
On an Encumbered Basis $9,300,000– GST Exclusive (NINE MILLION THREE HUNDRED THOUSAND DOLLARS)
Colliers international Consultancy and Valuation Pty Limited
Alex Thamm, AAPI Certified Practising Valuer B Bus Prop (Val) 14 December 2010 (Date of Signing Report)
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Summary of Valuation
Property Market value in existing state as at 31 December 2010
Lawsons Vineyard, Padthaway, South Australia $9,300,000
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Valuation extract
Property Description Particulars of Occupancy Market Value in existing state as at 31 December 2010
Lawsons Vineyard, Padthaway, The subject property comprises The property is currently $9,300,000 South Australia a total area of approximately tenanted with the current term 205.45 hectares of which expiring on the 30 June 2013. approximately 168.22 hectares The tenant has three rights of has been developed to irrigated renewal of four years each. vines in the period from 1968 through to 2005. The property is located within the Padthaway Geographic Indication and appears to have been developed to a high standard. Secondary improvements on the property include a residential dwelling together with associated shedding improvements in addition to vineyard and chemical shedding improvements. The property is held in three valuation extracts of title.
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