PLP – Quarterly Client Update

Private Land & Property Fund
Quarterly Client Update
Update as at and for the quarter ending 31 December 2023
Booster Investment Scheme 2
Industry spotlight: Avocados
The Fund owns several avocado orchards across Bay of Plenty and
Northland, which are leased on a long-term basis to the Darling Group.
The New Zealand avocado industry has faced several
headwinds lately, so it is worth outlining what is happening
in the industry and why we are comfortable with holding
avocado orchards as part of our long term fund strategy.
Over the past two years, avocado prices have dropped
significantly, and volumes have been highly volatile.
This has been due to two key external factors:
• Extreme weather events. Taking Cyclone Gabrielle as an example,
the cyclonic conditions experienced over the past two years can
result in significant fruit loss and damage. Gabrielle decimated
the avocado crop, resulting in overall very poor fruit quality.
• General climatic conditions: As those in Auckland well
know, the past 12 months has seen abnormally high
rainfall. The MetService graph for the first half of 2023
demonstrates just how abnormal this rain was:

And those in Tauranga had a similar weather pattern
– and an especially miserable January 2023!

Adverse growing conditions unsurprisingly
affects quality and fruit yields.
Overall, these two factors have meant that not only has
there been less volume harvested, but lower fruit quality
also meant that the fruit that was harvested attracted
lower prices, and was less suitable for export. This in
turn forced growers to sell volume in the domestic
market, which put further pressure on the price.
It is worth noting at this point that PLPF’s income on
these orchards is not directly affected by the variance
in price and yields as the properties are leased (this
is a deliberate decision to provide resilience and
cashflow stability). However, where we have seen the
impact is some softening of capital values for avocado
orchards which we have reflected in the portfolio
based on external valuations which we sought.
Despite these headwinds, as Managers we are
comfortable with our holdings. They are high quality,
well managed orchards and looking ahead, we expect
more normal growing conditions than the past two years
have delivered, resulting in improved grower returns.
The headwinds faced by the avocado industry also
highlight the importance of maintaining diversification
across different crop types and geographically
around New Zealand, as well as using fixed rate
leases to smooth income levels where appropriate,
as part of the portfolio’s overall approach.
Investment performance
Overall, the medium-term performance
of the Fund continues to track in line with
its objective, with annualised before tax
returns of 12.5% over the last 3 years.
The Fund aims to generate an average long-
term return of about 6.5%p.a. over rolling 7 year
periods from a combination of income and gains
as properties reach full productive capability.
Changes in the valuation of properties due
to general property market movements will
also impact the return of the Fund, but these
returns are not the Fund’s primary objective.
The Fund has derived just under 30% of the
medium to long term returns from gains as
plantings on properties mature and just over
30% of returns from cash income. The remainder
of the returns are from market movements.
Cash income, received primarily from leases
but also includes some crop receipts, is
typically distributed to investors. Whilst
lease income generally offers more stable
returns the total cash return of the fund will
fluctuate with the crop yields. The 2023 grape
harvest was smaller than forecast which has
impacted the overall cash yield of the fund.
As properties reach full maturity, it is expected
returns will shift more towards cash income.
We continue to look for opportunities to add
properties to the portfolio, including where
the opportunity to develop the productive
capability of that property exists.
Shorter-term performance over the last
quarter has been lower due to several factors.
The avocado market has faced a number of
challenges recently and we received updated
independent valuations which resulted in a
reduction in the carrying value of our three
avocado orchards. Whilst disappointing, this
affected only around 12% of the portfolio and
we remain confident of the long term benefit
of these investments within the portfolio.
Marlborough was impacted by a frost at the
end of October, and it is anticipated this will
impact the 2024 grape yields. Inflationary
pressure has also impacted the viticulture
sector with vineyard costs increased across the
industry. The combined impacts is a lowered
forecast for the 2024 harvest receipts for our
Marlborough vineyards, which has affected
the earnings accrued within the Fund.

Fund Size
(net asset value)
$130.7 million
Inception Date 13/06/2017
ManagerBooster Investment Management Ltd
SupervisorPublic Trust
Fund TypePortfolio Investment Entity (PIE)
Key Facts
Private Land and Property Portfolio
(Wholesale Portfolio)
Fund Size
(net asset value)
$132.0 million
Inception Date 07/01/2019
ManagerBooster Investment Management Ltd
SupervisorPublic Trust
Fund TypePortfolio Investment Entity (PIE)
Private Land and Property Fund (Fund)
The Fund obtains its property exposure by investing into the Wholesale Portfolio
alongside some cash held within the Fund.
Investment Holdings
Last 3 months0.7%0.6%
Last 6 months1.0%0.8%
Last 12 months8.4%8.7%
Last 2 years (p.a)10.6%10.4%
Last 3 years (p.a)12.5%12.1%
Last 5 years (p.a)
*
10.4%9.7%
Since inception 13/06/2017 (p.a)
*
10.4%9.6%
Fund Performance as at 31 December 2023
Before Tax
After Tax
at 28% PIR
Disclaimer: The Private Land and Property Fund (Fund) is part of the Booster
Investment Scheme 2 which is issued and managed by Booster Investment
Management Limited. The Fund’s Product Disclosure Statement is available at
www.booster.co.nz, by contacting your financial adviser or by calling Booster
on 0800 336 338.
This document is for informational purposes only. The information is derived
from sources believed to be accurate as at the date of issue and may change.
The content is of a general nature and does not take into account your
financial situation or goals and is not financial advice. Booster Investment
Management Limited and its related companies do not accept any liability for
any loss or damage arising directly or indirectly out of the use of, or reliance
on, the information provided in this document. The fund’s performance,
returns, or repayment of capital, are not guaranteed.
All figures are after fees. Please see the Product Disclosure Statement for
further details on fees.
*Returns prior to the inception of PLPF in January 2019 are based on the
underlying wholesale PLPP return.
The Fund has a minimum suggested investment timeframe of four years,
and its performance aims are measured over a 7-year horizon. The return
information below includes returns due to property market movements which
vary over time, so the range of returns may be different over a longer period.
However the fund aims to achieve a long-run return of 6.5% pa (before tax,
after fees) from a combination of rental and crop income, and capital gain
from improvements in property productive capacity. Past performance is not
an indicator of future performance.
Wholesale Portfolio
Total Assets (millions)
Property Assets (location / region)
Awatere Valley, Marlborough
Vineyard properties
$28.919.7
Hope, Nelson Region
Vineyard properties
$18.912.9
Hawke’s Bay
Winery building
$3.22.2
Hawke’s Bay
Vineyard property
$5.94.0
Mahana, Nelson region
Winery building & Vineyard property
$3.72.5
Kerikeri, Northland
Kiwifruit orchard property
$23.416.0
Waimea, Nelson region
Waimea West Hops Ltd
$10.67. 2
Southland
Dairy farmland
$32.822.4
Bay of Plenty & the Far North
Avocado orchards
$17.912.2
Total property assets$145.3
Other Assets
Cash / Income$0.2
Accrued income$1.1
Total Assets$146.6
Total Liabilities (millions)
Borrowings with BNZ$15.8
Other liabilities
(incl Property Operating Costs)
$0.0
Total liabilities$15.8
Net asset value $130.7
Gearing Ratio10.8
The investment objective and strategy of the Wholesale Portfolio allows it to borrow
to invest in more land and properties or to develop land and properties it already
holds. Bank of New Zealand (BNZ) has provided a loan facility of up to 50% of
the value of the secured properties for use by the Wholesale Portfolio to effect its
gearing strategy which results in BNZ holding a security interest over most of the
assets held by the Wholesale Portfolio. For further information on the Wholesale
Portfolio, please refer to the Fund’s PDS and Other Material Information document.
The gearing ratio shows the level of borrowing the Wholesale Portfolio has
undertaken as a percentage of total assets.
$%