THE TENANT

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Inghams Enterprises (NZ) Pty Limited

The sole tenant of the Properties is Inghams Enterprises (NZ) Pty Limited, which is a wholly-owned subsidiary of the Australian company, Inghams Group Limited, which is listed on Australian stock exchange (ASX:ING).

Inghams Group Limited are farmers, producers and distributors of poultry and stockfeed products across Australia and New Zealand. Inghams is the largest integrated poultry producer in Australasia, processing over 4 million birds per week. Ingham’s have a workforce of 8,000 and a strong network of processing and distribution facilities across Australia and New Zealand.

Inghams Enterprises (NZ) Pty Limited has been operating as a fully integrated chicken company, based in the Waikato region, since 1990. The tenant is five years into a 25 year term certain lease with an expiry of 17 July 2039. The tenant has five further options of 10 years, taking the final expiry date (if all options are exercised) to 17 July 2089. This lease is effectively a ‘triple net lease’ and all usual outgoings are recoverable from the tenant in addition to many capital costs.


New Zealand Poultry Industry

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Chicken – a New Zealand favourite

Chicken is an extremely popular meat choice – representing 52% of all meat consumed in New Zealand (figure 1).  New Zealanders eat around 37.5kg of chicken every year  – that’s 20 chickens per person, per year.

To meet demand, the poultry industry has 180 farms around the country, employing 3,500 people. The industry has a government mandated code of welfare and combined with the Poultry Industry Association of New Zealand’s (PIANZ) high standards of training, stockmanship and systems, means that NZ chicken is in high demand around the world. In fact, NZ is often described as the best place in the world to grow chickens, due to our temperate climate, advanced systems and disease-free status*.

Growth in Consumption

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Chicken is one of the cheapest and most popular meats in New Zealand and contains less saturated fat than red meats such as beef, pork or lamb.

In almost 30 years, annual poultry consumption in NZ has increased from ~14 kg (1990) to ~37 kg (2018) a compound annual growth rate of 3.4% per annum. Over the same period worldwide consumption of poultry increased 3.1%.

This compared to NZ consumption of beef which reduced by 2.5% per annum over the same period and the worldwide consumption of beef which remained flat (figure 2).

Carbon footprint

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New Zealand as a society is working to reduce carbon emissions. This is demonstrated by the Government’s proposed Zero Carbon Bill, which provides for a transition to a low emissions economy.

The transition to a low emissions economy is likely to favour the increased consumption of chicken meat as it has the lowest carbon footprint out of the commonly farmed and consumed meats (figure 3).

Key demand drivers for chicken

  1. Continued population growth in New Zealand

  2. Affordability, achieved through increased efficiency in production and growing systems

  3. Market positive consumer trends, in particular health, well-being and convenience related preferences

  4. The drive towards a low emissions economy.

Sources:
* PIANZ website
Figure 1 & 2 OECD Agriculture Statistics: OECD-FAO Agricultural Outlook (Edition 2018)
Figure 3 Environmental Working Group Meat Eaters Guide: Methodology 2011