Rural Funds property income jumps by 9.2%

Rural Funds (ASX:RFF) reported its FY25 financial results, showcasing a 9.2% increase in net property income, reaching $95.1M. This growth is primarily attributed to rental income from macadamia developments, benefiting shareholders. The increase in property income is complemented by a rise in net farming income, which increased by $3.3M to $2.3M, driven by improved commodity prices. Adjusted Funds From Operations also increased by 4.5% to 11.5 cpu. Independent valuations were conducted for 68% of the property portfolio, leading to a $15.2M, or 1.2% uplift in their values. Divestments throughout the year totalled $69.7M, occurring in line with book values as well. The portfolio strategy update also highlighted that eight properties, with a total asset value of $119M, were leased for a weighted average term of 9.7 years. These leases are expected to boost future revenue. Rural Funds also anticipates commencing staged development of two additional properties in FY26, focusing on macadamias and irrigated cropping. They will also allocate $96.9M for FY26 capital expenditure, funded by existing bank facilities.

The increase in property income is complemented by a rise in net farming income, which increased by $3.3M to $2.3M, driven by improved commodity prices. Adjusted Funds From Operations also increased by 4.5% to 11.5 cpu.

Independent valuations were conducted for 68% of the property portfolio, leading to a $15.2M, or 1.2% uplift in their values. Divestments throughout the year totalled $69.7M, occurring in line with book values as well.

The portfolio strategy update also highlighted that eight properties, with a total asset value of $119M, were leased for a weighted average term of 9.7 years. These leases are expected to boost future revenue.

Rural Funds also anticipates commencing staged development of two additional properties in FY26, focusing on macadamias and irrigated cropping. They will also allocate $96.9M for FY26 capital expenditure, funded by existing bank facilities.