Information Memorandum by nzrlc

NEW ZEALAND Rural Land Co SUS TAIN ABLE AOTEAROA

Information Memorandum AS AT 30 APRIL 2020

www.nzrlc.co.nz

Important Disclaimer - Please Read Carefully Version 17 as at 30 April 2020 This Information Memorandum is provided in relation to an opportunity (Opportunity) to subscribe for ordinary shares in New Zealand Rural Land Company Limited (NZRLC). By accepting a copy of this Information Memorandum you are acknowledging and agreeing to the below terms. No Retail Offer This Information Memorandum does not relate to an offer of financial products to retail investors for the purposes of the Financial Markets Conduct Act 2013 (FMCA). There is no product disclosure statement available for the Opportunity. Accordingly, there are not the same disclosures or levels of protection available as under a retail offer of financial products. Any offer of financial products for the Opportunity will only be made through a subscription agreement which is subject in all respects to the proposed investor providing certifications that they are a wholesale investor within the meaning of Schedule One to the FMCA. About this Information Memorandum Although reasonable care has been taken in the preparation of this Information Memorandum, no information has been independently verified by any person. No representation or warranty, express or implied, is made nor is any responsibility accepted with respect to the completeness or accuracy of any information contained in this Information Memorandum or any further information supplied in connection with it.

Investor Due Diligence This Information Memorandum does not contain or disclose all of the information that may be required to evaluate the Opportunity. This Information Memorandum contains forward looking statements. Such statements, estimates, projections and forecasts reflect various assumptions which may or may not prove to be correct. Actual results may differ materially. Prospective investors should conduct their own investigations, verifications and assessment of the merits of the Opportunity, identify the information that they require, request such information from NZRLC and engage their own professional advisers. Limited Liability Except insofar as liability under any law cannot be excluded, no person shall have any responsibility or liability arising in respect of the information contained in this Information Memorandum or in any way for errors or omissions in it (including responsibility to any person by reason of negligence). Prospective investors must verify such information themselves and are solely responsible for their investment decisions. Legal Effect Nothing contained in this Information Memorandum is intended to be legally binding. Only the specific terms which are contained in a final subscription agreement will have any legal effect. In no event will such a subscription agreement contain any representation(s) as to projections of any kind.

This Information Memorandum does not constitute investment, accounting, financial, legal or tax advice. Neither the delivery of this Information Memorandum nor the subsequent execution of any agreement in relation to NZRLC shall constitute a representation that there has been, or will be, no change in the information contained in this Information Memorandum or the information on which it is based. 2

Definitions of Terms used in this Presentation

CAGR

FDI

NZRLM

DTA

GDP

OIO

DTI

KgMS

RBNZ

Compounded Annual Growth Rate

Debt-to-Assets Ratio

Debt-to-Income Ratio

EFS

Economic Farm Surplus

FWE

Farm Working Expenses

FTA

Free Trade Agreement

Foreign Direct Investment

Gross Domestic Product

Kilogram of Milk Solids

NPL

Non-Performing Loans

NTA

Net Tangible Assets

NZRLC

New Zealand Rural Land Company Limited

New Zealand Rural Land Management Limited

Overseas Investment Office

Reserve Bank of New Zealand

RoA

Return on Assets

RWA

Risk Weighted Assets

WALT

Weighted Average Lease Term

Contents

103

128

132

INTRODUCTION

NEW ZEALAND RURAL LAND COMPANY

GLOBAL DAIRY TRENDS

RISKS

THE NEW ZEALAND STORY

THE CURRENT OPPORTUNITY IN NZ RURAL LAND

APPENDICES

NEW ZEALAND RURAL LAND CO INTRODUCTION

AS THE WORLD’S POPULATION GROWS, PRODUCTIVE AGRICULTURAL LAND BECOMES INCREASINGLY IMPORTANT

NEW ZEALAND HAS A INTRODUCTION COMPETITIVE ADVANTAGE IN AGRICULTURE

NEW ZEALAND RURAL LAND COMPANY (NZRLC) SEEKS TO INVEST IN RURAL LAND ASSETS OPPORTUNISTICALLY

CURRENTLY THERE EXISTS AN OPPORTUNITY TO PURCHASE THE WORLD’S MOST SUSTAINABLE DAIRY FARMS AND NZRLC HAS A UNIQUE SOLUTION TO CAPTURE THE OPPORTUNITY

NEW ZEALAND Rural Land Co SUS TAIN ABLE AOTEAROA

A New Zealand domiciled investment company seeking to opportunistically acquire quality New Zealand Rural Land.

DAIRY

SHEEP & BEEF

HORTICULTURE & VITICULTURE

FORESTRY & OTHER

www.nzrlc.co.nz 7

New Zealand Rural Land Company seeks to invest in rural land assets opportunistically across the cycle

DAIRY

HORTICULTURE & VITICULTURE

SHEEP & BEEF

FORESTRY & OTHER

SEE PAGE 135 FOR SUB-SECTOR ASSET CYCLE RETURNS 8

Agricultural /Rural Land is an attractive asset class An increasing global population drives demand for food production, but agricultural land is a limited resource. • As global population grows, food production must increase to meet the nutrition demand; • However, productive agricultural land is limited; • In the past, exponential growth in food demand was met by innovation, scientific advancements and farming efficiency adding value to agricultural land; • Increasing productivity was accompanied by high farm inputs and high emissions which is no longer aligned with consumer preferences; • Going forward, increasing global appetite for food must be catered for with sustainable agricultural sources and agri-tech solutions that have lower environmental footprints; • This implies food sources that have a detrimental effect to the environment will transition and the value of productive sustainable agricultural land can be expected to increase.

Global Food Demand (kcal/day x 1015) 45

Now (2010-2050)

Then (1961-2000) Population +98% Food production +146% Yields more than doubled Arable land in use +8% Agricultural inputs rose: - Nitrogen fertiliser (x7) - Phosphate fertiliser (x3) - Irrigation water (x2)

40 35 30 25 20 15 10

+41%

increase in population (from 6.9 billion to 9.7 billion people)

+71%

increase in food required (additional 127x1015 kcal)

5 0 1500

1550

1600

1650

1700

1750

1800

1850

1900

1950

2000

2050

Total Global Agricultural Land (‘000 hectares) 5,000,000 4,900,000 4,800,000 4,700,000 4,600,000 4,500,000 4,400,000 4,300,000 4,200,000

Source: The Science of Food Security (2018) - https://www.nature.com/articles/s41538-018-0021-9.pdf; http://www.fao.org/faostat/en/#data/RL/visualize

1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

New Zealand is one of the most sustainable, clean and green producers of primary produce in the world New Zealand’s continued success in food production lies in its natural environment allowing it to produce sustainable food products cost efficiently, resulting in New Zealand rural land being an attractive asset class. NATURAL ENVIRONMENT

EFFICIENT & INNOVATIVE INDUSTRY

• Temperate climate, good soil and consistent rainfall provides ideal conditions for pasture growth;

• New Zealand has a long history of excellence in farming; • This has resulted in constantly improving productivity and efficiency;

• Pasture-based farming provides a cost advantage over feed-based systems;

• Our innovative Agri-tech sector supports the “New Zealand Advantage”;

• Grass-fed meat and dairy is a premium product and well aligned with changing customer preferences.

• New Zealand is a world leader in risk mitigation strategies.

New Zealand All Farm Type Price Index*

+6.52% p.a

4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0

MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP DEC MAR JUN SEP MAR SEP MAR SEP MAR SEP 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12 13 13 14 14 15 15 15 16 16 16 17 17 18 18 19 19 * Source: REINZ Data 1996-2019

Current Opportunity within New Zealand that NZRLC is focused on

DAIRY

SHEEP & BEEF

HORTICULTURE & VITICULTURE

FORESTRY & OTHER

Global outlook confirms New Zealand Dairy Land is a particularly attractive asset class at present The world will be short ~30 million tons of dairy and New Zealand is well positioned to cater to the demand. • Global dairy consumption will continue to experience secular growth both in scale and consumption per capita while global dairy production has not been keeping pace;

Demand 79 MT

Deficit/Gap -30 MT

• The demand-supply gap in global dairy is expected to widen from 6 million tons (2017) to 30 million tons (2027) of milk equivalent, increasing the value of dairy commodities;

Demand 47 MT

Deficit/Gap -6 MT

• A large share of the deficit is in Asian markets. New Zealand is well-positioned to cater to deficit markets with free trade agreements and an established supply chain;

49 MT Supply Supply

41 MT

• In addition, consumer trends indicate a higher preference for natural, healthy and sustainable dairy products;

• Global consumers will continue to rely on the export of sustainably-sourced, grass-fed, premium New Zealand dairy products.

2017

2027 Median Dairy Farm Prices Per Hectare Current price levels for dairy farms*

$50,000 Median NZ$ per hectare of dairy farm land

• Supply continues to be outpaced by demand and misaligned with consumer preferences - growing mainly in regions with low efficiency, poor animal welfare and high environmental footprints;

49 MT

Supply

$40,000

Estimated range for potential capital appreciation***

$30,000

$20,000

$10,000

NZRLC indicative purchase price levels for comparable farms** Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2029

Source: A Winning Growth Strategy for Dairy, McKinsey, 2019 *Dairy Farm Median Land Prices for quarter ending August 2019 over quarter ending August 2017. Dairy farm prices referred to in the chart are median land prices which is the midway point of sale price in a 3-month period. Median is a better indicator for market trend for land prices. Outliers and skew have a lesser impact on median when compared to simple averages; The dataset is smaller - Sale volume data 13 farms have been sold in August 2019 vs 20 farms in August 2017; **NZRLC indicative price levels is based on median all farm data; average production levels and does not factor in regional and site-specific differences.

New Zealand Dairy Land is an attractive long-term asset New Zealand’s success in dairy is attributable to its natural conditions, efficient industry, and world-leading risk management systems.

Natural Conditions

Efficient Industry

Ideal for pasture-based dairy farming

Long history of dairy production

Results in lower production costs

Focus on continuous improvement

Produces and allows for a premium grass-fed product

Supported by vibrant ecosystem for Agri-tech innovation

Lowest emissions globally for dairy*

Our “Kaitiangitanga” / “Powered by Place”**

World Leader in Managing Industry Risks

Mitigating environmental risks by reducing surface water contamination and on-farm emissions Mitigating social risks by increased transparency, community programs and respecting social license Political risks are mitigated by Dairy’s importance to regional economies and employment Focuses government attention in mitigation of biosecurity risks

* Fonterra: https://www.dairytomorrow.co.nz/wp-content/uploads/2017/12/dairy-strategy-2017-A4-booklet-Part3.pdf ** NZTE: https://toolkit.nzstory.govt.nz/assets/322923?tags=Powered%20by%20Place

Mitigating risks of climate change with focus on evidence-based transition solutions 13

Increasing milk prices, improving profitability and shrinking land supply create a positive macro story for future dairy farm land price appreciation

VS 2019

783.78 2.25 2.252.25

VS 2019

4.52 4.52 4.52 4.27 4.27 4.27

NZ$8.47 2.96 2.96 2.80 2.80 2.80 - NZ$9.422.96

2.60 2.60 2.60 0.88 0.880.88

4.90 4.90 4.90 4.20 4.20 4.20

334.33 4.20 4.20 4.20 4.20 4.20 4.20 4.07 4.074.07 3.73 3.733.73 3.64 3.643.64

0.00 0.00

PROJECTED RANGE PROJECTED PROJECTED RANGE RANGE 201314 201415 201516 201617 201718 201819Farm 14 314 201415 201415 201516 201516 201617 201718 201718 201819 201819 Average201617 price per kgMS for NZ$Surplus per kgMS Projected Farm Working Expenses and Economic FOR 2029 FORFOR 2029 2029

2019-2029*

0.00 2025

+52% TO +61%

Economic Economic Farm Farm Surplus Surplus (EFS) (EFS)(EFS) Economic Farm Surplus +16% Farm Farm Working Working Expenses Expenses (FWE) (FWE) Farm Working Expenses (FWE) TO +29%**

2.00 Land Supply for Dairy Farms 2.00 2.00 projected to decline in the 1.80 next five years 1.80 1.80 1.6 1.6 1.6 1.60 1.8 1.60 1.60 1.6 1.40 1.40 1.40 1.20 -9% 1.20 1.20 VS 2019 1.00 1.00 1.00 0.80 0.80 0.80 0.60 0.60 0.60 0.40 0.40 0.40 0.20 0.20 0.20 2025 2025

decade

Millions Millions

projected to grow in the next

Dairy Farm Profitability projected to grow in the next decade

Millions

ng king Expenses Expenses and and Economic Economic Farm Farm Surplus Surplus Farmgate Milk Prices Working Expenses and Economic Farm Surplus

million hectares of Dairy Farmland

2019 - 2029

2019-2025

Economic Farm Surplus (EFS) Farm Working Expenses (FWE)

*OECD-FAO Agricultural Outlook 2019-2028: http://www.fao.org/3/ca4076en/ca4076en.pdf; **Annualised rate of +1.7% to +2.9% per annum based on OECD-FAO Agricultural Outlook 2019-2028.

3.74

2.96

3.14

2.64

3.78

2.25

2.60

2.96

2.80

4.27

4.52 14

Three factors presently create an opportunity to acquire New Zealand Dairy Land at a discount

Overseas Investors Blocked â&#x20AC;&#x153;Foreign Buyer Banâ&#x20AC;?

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Overseas Investors Blocked “Foreign Buyer Ban”

Overseas Buyers Largely Blocked from Acquiring New Zealand Land

Widespread Negative Sentiment on the Sector

A “Foreign Buyer Ban” Ministerial directive issued in November 2017 has severely constrained the ability of foreign investors to access New Zealand Dairy Farmland;

Banks Reducing Credit to the Sector

Overseas Investment Office (OIO) approvals granted to overseas buyers for rural land are down over -50% from 2014 highs.

Approved Applications 2013-2018 Overall Agri-business

150

120

Applications

0 2013

2014

2015

2016

2017

2018

Overseas Investors Blocked â&#x20AC;&#x153;Foreign Buyer Banâ&#x20AC;?

Banks are now Reducing Credit to the Sector

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

$ Dairy Sector has High Reliance on Debt

Dairy Farm Balance Sheets are Currently Stressed

Banks are Reducing Exposure and Demanding Principal Repayments

RBNZ has proposed changes to Bank Capital Requirements*

But Farms Barely Covering Interest Payments

*RBNZ Capital Review Decisions 2019; https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Policy-development/Banks/Review-capital-adequacy-framework-for-registered-banks/decisions/Capital-Review-decisions.pdf?revision=ebc7cac0-a0ac-4ac4-b079-f7737227e719

Overseas Investors Blocked “Foreign Buyer Ban”

Dairy Sector has High Reliance on Debt Funding and Balance Sheets are Currently Stressed • Since 2003, dairy debt has grown +267% while total overall loans grew much slower +192%;

Widespread Negative Sentiment on the Sector

• Dairy debt now accounts for 9% of overall loans and 65% of agriculture loans; • Debt has been the primary source of capital for Dairy Farms in New Zealand; • The dairy sector as a whole is very stretched financially - Debt-to-Assets (DTA) ratio for owner-operated dairy farms has grown from 42% in 2009 to 52% in 2018;

Dairy Sector Debt

• A large group of dairy farms are heavily indebted - 35% of outstanding debt is held by highly indebted farms (i.e. >NZ$35 debt per kgMS);

NZ$ per kgMS

Ê Operators who may have traditionally been potential acquirers have high debt levels themselves.

300%

200%

100%

Growth of Dairy Sector Debt

Composition of Bank Lending

2013

Dairy loans Debt/kgMS

45 000

24%

2014

2015

2016

2017

2018

2000

2003

2006

40 000

Dairy Sector Debt

35 000

30 000

14%

Agriculture Sector Debt-to-Income Ratio

Debt per kgMS produced % of debt held by highly indebted farms (RHS)

25 000 20 000

10 000 20

5 000

2013

2019

2017 2018

2016

2015

2013 2014

2012

2011

2010

2009

2008

2007

2006

2005

0 18

2004

1% 1%

2003

NZ$ per kgMS

15 000

Debt per kgMS has grown from NZ$ 9.48 2014 2015 2016 2017 in 2003 to NZ$ 21.99 in 2019. 2018

Dairy Agriculture

400%

% Of Debt Held By Highly Indebted Farms

NZD million

9% Household Business Other Agriculture Dairy Sheep and Beef Horticulture Other Agriculture

Dairy Agriculture

400%

% Of Debt Held By Highly Indebted Farms

Ê High Debt-to-Income (DTI) farms are struggling to service debt despite strong milk prices;

Agriculture Sec

Debt per kgMS produced % of debt held by highly indebted farms (RHS)

• Options for relief are limited:

60%

Banks Reducing Credit to the Sector

400%

300%

200%

100%

2000

2003

2006

2009

2012

2015

2018

Overseas Investors Blocked “Foreign Buyer Ban”

Concerned about resilience - RBNZ has Proposed Changes to Bank Capital Requirements. Banks are Reducing Exposure and Demanding Principal Repayments

Widespread Negative Sentiment on the Sector

• RBNZ proposes Tier 1 Capital requirement to be doubled from 8.5% to 16% of risk-weighted assets (RWA) over a seven-year transition period*;

Banks Reducing Credit to the Sector

• For Banks, maintaining the status quo is not an option - Banks can either increase their Tier 1 Capital or reduce their risk-weighted assets.

OPTION 2

RBNZ proposes Tier 1 capital requirement to be doubled from 8.5% of risk-weighted REDUCE assets, to 16 percent* over a

INCREASE TIER 1 CAPITAL RWA TO MEET CURRENT RWA five-year transition TO MEET CURRENT TIER 1 CAPITAL period RBNZ decision expected sectors/borrowers

Public consultation ends, submissions received are reviewed by RBNZ

10%

AUG 2019

APR 2019

JUN 2019

FEB 2019

DEC 2018

OCT 2018

AUG 2018

JUN 2018

0% FEB 2018

Dec. 2019

APR 2018

May 2019

DEC 2017

Dec. 2018

30% 20%

• Significantly increasing principal repayments.

Dec. 2017

40%

OCT 2017

• Decreasing exposure to with higher risk profile;

50%

AUG 2017

RBNZ proposes higher bank capital requirements to make the banking system more resilient

70% 60%

DEC 2016

• Pass on costs by increasing interest costs for farmers (not viable).

RBNZ initiates review of bank capital framework

80%

JUN 2017

• Decreased profitability on agriculture loans which are already low returning** (and/or);

This option would require banks to reduce risk profile of loan book by:

Principal & interest

90%

FEB 2017

This option would result in:

Interest only

Revolving credit

100%

APR 2017

OPTION 1

Dairy Sector Debt by Type

The only viable option for banks is to reduce RWA by reducing total dairy debt which they have already begun to do.

Agriculture Credit Growth

SEP2019

JUL2018

MAY 2018

MAR 2018

JAN2018

SEP2018

NOV2018

JUL2018

MAY2018

JAN 2018

MAR2018

NOV 2018

SEP2017

JUL 2017

MAY 2017

MAR 2017

JAN 2017

NOV 2016

SEP2016

4% JUL 2016

*16% for ‘systemically important’ banks and 14% for all other banks; Although regulatory minimum is 8.5%, banks currently hold ~13.5% of their risk-weighted assets as Tier-1 Capital RBNZ Capital Review Decisions 2019; https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Policy-development/Banks/Review-capital-adequacy-framework-for-registered-banks/ decisions/Capital-Review-decisions.pdf?revision=ebc7cac0-a0ac-4ac4-b079-f7737227e719 https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Policy-development/Banks/Review-capital-adequacy-framework-for-registered-banks/decisions/Capital-Review-guide. pdf?revision=179d7d6c-bad6-47e2-8883-b53b16184e5c&la=en **Agricultural lending is one of the lowest returning sectors for bank lending - Summary of Submissions, July 2019, RBNZ https://www.rbnz.govt.nz/-/media/ReserveBank/Files/regulation-and-supervision/banks/capital-review/submissions/Summary-to-submissions-for-ratio-paper.pdf?revision=40214835-c403-4255ab66-625b37a0fd31&la=en Source: RBNZ Financial Stability Report; DairyNZ Economic Survey.

12%

MAY2016

• Credit growth to the dairy sector has declined to below zero, while lending to other agriculture sectors has grown steadily.

Dairy Other Agriculture Dairy H2 2019

16%

MAR2016

• Since December 2016, the share of “interest only” loans has decreased from 67% to 58% while “principal & interest” loans have increased from 8% to 16%;

20%

JAN2016

• Banks are increasingly requiring higher interest, principal repayments and higher profitability for new loans;

Widespread Negativity on the Sector, Despite Attractive Macro Story

Overseas Investors Blocked â&#x20AC;&#x153;Foreign Buyer Banâ&#x20AC;?

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Southland Federated Farmers vice-president Bernadette Hunt speaks about issues faced by farmers in New Zealand https://media.stuff.co.nz/video/ production/1568259154996-hunt.mp4

Leading to Dairy Farm Sales coming to a Grinding Halt and the Price Decline Provides an Opportunity • The confluence of these externalities has resulted in a lack of capital for a fundamentally attractive long-term asset;

• Dairy farm sales volumes are grinding down to historical lows: Ê Farm sale volumes in 2019 are -30% lower than in 2016;

RBNZ & OIO Policy Changes $50,000 Median NZ$ per hectare of dairy farm land

• Dairy farm prices have declined by -16% since 2017* (OIO and RBNZ policy changes) due to a combination of recent negative factors;

Median Dairy Farm Prices Per Hectare*

$45,000 $40,000 $35,000 $30,000 $25,000 $20,000

• NZRLC’s ability to acquire farms at a further discount to 2019 levels offers the potential for attractive NTA growth in the future.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 2019

Median Dairy Farm Prices Per Hectare* 2017 levels Pre OIO and RBNZ policy changes

Current price levels for dairy farms**

NZRLC indicative price levels for comparable farms***

$50,000 Median NZ$ per hectare of dairy farm land

• NZRLC believes it can acquire dairy land at an even greater discount (around -26% to -38% lower than 2017 levels) for large scale farms (100+ h.a.);

CAGR 8.19% P.A.

$5,000

Ê REINZ data for 12 months preceding October 2019 shows that it takes +60%; longer to sell (110 days) as compared to 2016 (70 days). • The grinding halt has resulted in a decline in prices which we believe presents a potentially attractive entry price point for large scale farm acquisition;

CAGR +5.88% P.A.

$15,000 $10,000

16%

$40,000

26% to -38%

$30,000

$20,000

This would take us back to ~2007 prices

$10,000

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: REINZ; *Dairy Farm Median Land Prices for quarter ending August 2019 over quarter ending August 2017. Dairy farm prices referenced in the chart are median land prices which is the midway point of sale price in a 3-month period. Median is a better indicator for market trend for land prices. Outliers and skew have a lesser impact on median when compared to simple averages; **The dataset is smaller - Sale volume data 13 farms have been sold in August 2019 vs 20 farms in August 2017; ***NZRLC indicative price levels is based on median all farm data; average production levels and does not factor in regional and site-specific differences;

Larger Dairy Farms are where the opportunity is most significant - Data set light but indicative of trend Median Dairy Farm Prices 2017 - 2019 (NZ$ per hectare)

100-250 hectares

250-500 hectares

$45,000

$42,800 n=5

$40,000

$35,000

$35,300 n=16

Median prices for dairy farms (100-250 hectares) are down 34% in 2019 vs 2017

$30,000

-34%

$25,000

$23,300 n=12

Median prices for dairy farms (250-500 hectares) are down 49% in 2019 vs 2017

$20,000

$15,000

Q3 2017

Q3 2018

$21,800 n=5 -49%

Q3 2019 22

Dairy Farm Prices over the Next Decade NZRLC expects that the positive macro story + New Zealand’s Competitive Advantage will drive land price appreciation in the future. Median Dairy Farm Prices Per Hectare

Using the Canterbury region as an example:

• This is an annual capital gain in the range of +3.00% and +4.50% per annum. This is comprised of underlying asset growth estimated at +1.26% to +2.03% per annum over 2019 levels + NZRLC’s forecast annual accretion of between +1.74%-+2.47% per annum which is based on an acquisition discount between -26% to -38% to 2017 price levels and a subsequent return to market prices over the ten year period [2019-2029].

Estimated range for potential capital appreciation***

$50,000 Median NZ$ per hectare of dairy farm land

• Based on our indicative purchase price, NZRLC forecasts a potential upside range of +38% and +49% by 2029;

Current price levels for dairy farms*

$40,000

$30,000

$20,000

NZRLC indicative purchase price levels for comparable farms**

$10,000

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

2029

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Historical Growth Rates vs Next Decade Market Forecast Median Dairy Farm Prices Per Hectare Current price levels for dairy farms*

Importantly NZRLC’s 2029 land price forecast is still below 2017 levels.

For further detail and regional analysis see pages 89-95.

Median NZ$ per hectare of dairy farm land

$50,000

$30,000

$20,000

NZRLC indicative purchase price levels for comparable farms**

$10,000

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

PERIOD PERIOD DESCRIPTION ANNUAL GROWTH RATE

19962019

20072017

20072019

20092019

20192029

Since Farms Sales Data was Collected by REINZ

Pre GFC (including GFC) to Pre Foreign Buyer Ban and Credit Reduction

Pre GFC (including GFC) to Today (including Foreign Buyer Ban and Credit Reduction)

Last Decade (Excluding GFC) and (including Foreign Buyer Ban and Credit Reduction)

Next Decade

+4.58%

+4.21%

+1.26%

+2.03%

Estimated range for potential capital appreciation

$40,000

2029

+1.26% - +2.03% (p.a)

NZRLC GROWTH ESTIMATE* from 2019 market levels to 2029 market levels

Source: REINZ; The last 23 years witnessed: The decade before 2017 The last 12 years witnessed: The last decade witnessed: next decade is expected *Dairy Farm Median Land Prices for quarter ending August 2019 over quarter ending August 2017. Dairy farm prices referred in the chart are median land prices which is the midway point of sale price in a 3-month period. Median is a better indicator for market trend for land prices.The Outliers and skew have a to •Strong global demand, witnessed: • Strong global demand, • Strong global demand, witness: lesser impact on median when compared to simple averages; The dataset is smaller - Sale volume data 13 farms have been sold in August 2019 vs 20 farms in August 2017; •Over a decade of high • Strong global demand, • Increasing efficiency, • Increasing efficiency, • Strong global demand, **NZRLC indicative price levels is based on median all farm data; average production levels and does not factor in regionalintensification and site-specific differences. (+16.12%), • Increasing efficiency, • Low intensification (+1.79%), • “Low-to-None” • Favourable consumer *** This is an annual forecast capital gain in the range of +3.00% and +4.50% per annum over the ensuing ten year period. is composed growth estimated at +1.26% to +2.03%•perGFC annum 2019 levels which is premised from market growth rates from 2007-2019 and 2009-2019 KEY •AThis decade of low of underlying asset• “Low-to-None” andover recent domestic intensification (+1.07%), preference shift towards (refer pages 23 & 26) + NZRLC’s forecast annual accretion of between +1.74%-+2.47% per annum which is based on an acquisition discount between -26% to -38% to 2017 price levels and a subsequent return to market prices over the ten year period [2019-2029]. FACTORS intensification, (+1.07%), intensification (+0.72%), policy changes (OIO, RBNZ). • Recent domestic policy sustainable dairy, •GFC and recent domestic • GFC. changes (OIO, RBNZ). • Increasing commodity prices, policy changes (OIO, RBNZ). • No further intensification

We believe we can capitalise on this via NZRLC Acquire fundamentally strong assets* at a discount and lease to quality operators /counterparties.

NEW ZEALAND Rural Land Co SUS TAIN ABLE AOTEAROA

• A majority New Zealand owned, controlled and domiciled investment company; • Structured as a Land Portfolio Investment Entity (PIE)** with an initial WALT of 10 -15 years; • Listing on the NZX within 12-14 months (by 30 June 2021) via a Direct Listing (Compliance Listing); • Managed by New Zealand Rural Land Company Management Limited (NZRLM) through a legally robust and transparent investment structure.

Invests in high-quality assets as opportunities emerge

DAIRY Current Opportunity

Leases to experienced, well-financed, sustainability-focused operators • NZRLC will lease the underlying land to quality counterparties / operators who are best positioned to manage on-farm and other business risks; • Counterparties will be selected based on:

SHEEP & BEEF

- Operating Performance Experience / History; - Strong Balance Sheets; - Governance;

HORTICULTURE & VITICULTURE

- Sustainability Focus, Environmental Compliance & High Animal Health / Welfare Standards. • NZRLC will collaborate with counterparties and partners for due diligence in asset acquisition;

FORESTRY & OTHER

• NZRLC will offer the potential for regular lease payments and long-term capital appreciation while mitigating traditional risks from operational assets and commodity price volatility.

*NZRLC may acquire an equity position or other financial instrument including debt as a pathway to achieve its goal of long term ownership of New Zealand rural land. **NZRLC will be a Portfolio Investment Entity (PIE) for tax purposes at the time of listing on the NZX, meaning that tax is paid on the investors behalf at a rate approximating the investors marginal tax rate but capped at 28%. PIE’s offer significant advantages from an administrative perspective. For tax purposes, if you are a New Zealand resident and have supplied the correct PIR, tax is usually paid on your behalf at a rate approximating your marginal tax rate and there is no further tax to pay. PIE tax is capped at 28%, which can be a benefit to 33% tax rate investors. Find out more about PIE at https://www.ird.govt.nz/roles/portfolio-investment-entities

We believe we can capitalise on this via NZRLC NZRLC offers a unique solution in the current marketplace. NZRLC offers Investors: • Lower cost and transparent access to New Zealand rural assets;

Investors

• Credible and reliable counterparties for regular dividend flow;

need a solution

• Exposure to the asset within the agriculture sector that has historically appreciated over time - Land; • Liquidity.

NEW ZEAL AND Rural L and Co SUS TAIN ABLE AOTEAROA

NZRLC offers Banks / Highly Indebted Farms: • Credible New Zealand-based investors; • Fresh equity into the sector; • Politically palatable solution to rural debt challenges;

NZRLC offers Counterparties / Operators:

Banks

need a solution

Operators need a solution

• Long-term landowner / capital provider; • High quality agricultural assets via lease which improves their capital efficiency; • Access to further large scale operations.

• Quality New Zealand based operators for long-term success and sustainability.

We believe we can capitalise on this via NZRLC Forecasting attractive long-term returns (over 10 years) while mitigating traditional risks.

+ Forecast dividend yield of*

Forecast asset value growth between**

+3.50% p.a. (Net of Fees and Costs but before tax)

MITIGATING TRADITIONAL RISKS

No on-farm risks (via either sharemilker or operational partner)

Forecast total returns between

+3.00% and +4.50% p.a.

+6.50% to +8.00% p.a.

(Net of Fees and Costs)

(Net of Fees and Costs but before tax)

No direct exposure to volatile commodity prices

Limited exposure to environmental risks

No exposure to animal health risks

FORECASTING ATTRACTIVE LONG-TERM RETURNS

No direct exposure to farmer co-ops

* Forecast dividend yield is based on writing a minimum 4.5% lease with the underlying tenant less capex, listed company costs, independent director costs, accounting and audit costs and NZRLM management fee (0.50% p.a.) ** This is an annual forecast capital gain in the range of +3.00% and +4.50% per annum over the ensuing ten year period. This is composed of underlying asset growth estimated at +1.26% to +2.03% per annum over 2019 levels which is premised from market growth rates from 2007-2019 and 2009-2019 (refer pages 23 & 116) + NZRLCâ&#x20AC;&#x2122;s forecast annual accretion of between +1.74%-+2.47% per annum which is based on an acquisition discount between -26% to -38% to 2017 price levels and a subsequent return to market prices over the ten year period [2019-2029].

NZRLC will own NZ Rural Land Assets and Lease to the Highest Quality Counter-parties (tenants) NZRLC believe’s the primary store of long-term value is in the Land therefore this is what we would like to own. The attractiveness of the land itself coupled with a regular and long term lease payment is what makes this structure an attractive way to access one of New Zealand’s largest, most successful and important asset classes - Rural Land.

We believe that establishing a property company that owns the land and leases it to the highest quality counter-parties allows investors to have a ‘pure play’ land asset with regular and long-term income whilst allowing the sector to release capital into farming efficiency, R&D, job creation and debt reduction which facilitates and promotes capital efficiency within the economy.

Separating Land Ownership from Operations increases capital efficiency and allows investors to own ONLY the rural land.

GLOBAL DAIRY TRENDS

THE WORLD IS EXPECTED TO BE SHORT

-30 MILLION TONS * 2027

NEW ZEALAND IS WELL POSITIONED TO MEET THIS DEFICIT

OF MILK EQUIVALENT BY

*A winning growth strategy for Dairy, McKinsey, 2019

Global Dairy Trends

Growing Demand

Changing Consumer Preferences

Global Deficit

Growing Demand

Changing Consumer Preferences

Global Deficit

Global Dairy Consumption Continues to Grow

Global Dairy Consumption in Million Tonnes

2018 2028 % CHANGE

+20%

+14%

+21%

+13%

26.74

509.14 23.57

422.54

13.04 10.77 5.35

Fresh dairy products

6.09

Whole milk powder

4.38

5.03

Skim milk powder

Butter

Cheese

Source: OECD-FAO Agricultural Outlook 2019-2028 - http://www.fao.org/3/ca4076en/ca4076en.pdf;

Changing Consumer Preferences

Growing Demand

Global Deficit

Population Growth and Rising Incomes Drive Increasing Dairy Consumption • Global dairy consumption will continue to experience secular growth both in scale and consumption per capita. The former is driven by population growth while the latter is a result of rising incomes; • The global population is forecast to grow +10% (8.36 billion by 2028) requiring food supply for an additional 766 million people in 2028; • Per capita incomes are forecast to grow +28% by 2028 in real terms*, in turn per capita dairy consumption is forecast to grow at +10% over the same period; • Historically, as incomes increased globally, animal-based protein including dairy has formed a larger part of diets.

Share of calories from Animal Protein vs. GDP per capita

3.5

3.0

2.5

2.0

1.5

1.0

0.5

2008

2013 Fresh dairy products

2018 Butter

Cheese

2023 Skim milk powder

2028 Whole milk powder

Source: OECD-FAO Agricultural Outlook 2019-2028 - http://www.fao.org/3/ca4076en/ca4076en.pdf; World Bank - World Development Indicators; Source: https://ourworldindata.org/grapher/share-of-calories-from-animal-protein-vs-gdp-per-capita? * Per Capita Income Forecast 2.5% p.a.- PPP terms, Constant 2011 US dollars

10%

Share of total calories from animal protein

Butter, Cheese, Skim milk powder, Whole milk powder (Kg, per year)

Fresh Dairy Products (Kg, per year)

Global Per Capita Dairy Consumption

4% Africa Asia Europe North America Oceania South America

0 $567

$1,000

$10,000

GDP per capita

(Refer Appendices for larger format of this chart - page 148)

Growing Demand

Changing Consumer Preferences

Global Deficit

Consumer Preferences are Changing McKinsey reports that dairy companies and their products need to factor in these consumer preferences in order to have a winning strategy:

What Millennial Consumers Demand:

Natural • Millennial consumers now have more spending power than any other generation before, and they are driving overall consumer preferences;

Organic Traceable Clean Label

• Customers are increasingly mindful of overall health and wellbeing; • Consumers today are environmentally and socially conscious – demand ethically sourced, sustainable products and are willing to pay a premium for them.

Sustainability Transparency Animal Welfare

Socially Oriented

Health & Wellbeing

Protein Performance Alternatives

Sources: A Winning Growth Strategy for Dairy, McKinsey, 2019; https://www.mckinsey.com/~/media/McKinsey/Industries/Consumer%20Packaged%20Goods/Our%20Insights/A%20winning%20growth%20formula%20for%20dairy/A-winning-growth-formula-for-dairy-vf.ashx; NZMP – Top 5 consumer dairy trends in 2019; https://www.nzmp.com/content/dam/nzmp/pdfs/nzmp-general-insights-fast-facts-consumer-trends-2019.pdf

Changing Consumer Preferences

Growing Demand

Global Deficit

Major Producers Misaligned with Changing Demand Major producers are not aligned with changing consumer preferences:

Increase in Milk Production 2018-2028

â&#x20AC;˘ Feed-based, contained dairy systems like the ones found in North America are poor in terms of animal welfare;

Oceania Other Developed Developing Markets

Yield Tonnes per animal High high

Industry efficiency efficient

High

efficient

â&#x20AC;˘ Fragmented and inefficient industry in emerging markets has low focus on animal welfare and their environmental footprint.

moderate

not efficient

low

Low

High Growth

low

Moderate Growth

moderate

poor

good

Low high

Oceania

Source: Fonterra; OECD-FAO Agricultural Outlook 2019-2028 - http://www.fao.org/3/ca4076en/ca4076en.pdf.

Other Developed

Developing Markets

High Environmental Footprint

excellent

High

Animal welfare

Growing Demand Growing Demand

Changing Consumer Preferences

Global Deficit

Changing Preferences will Impact Production Emerging trends in consumer behaviour reveal strong preference for sustainable, socially and environmentally conscious products;

Production losses in the industry (if any) will first impact feed-based, contained dairy systems - those predominantly seen in the US;

Grass-fed and pasture-based systems in New Zealand will remain in favour with consumers given our focus on animal welfare and long-term sustainability.

Growing Demand

Changing Consumer Preferences

Global Deficit

Disruption by Dairy Alternatives? Rise of Dairy Alternatives

Substitution from Plant-Based Alternatives Milk Alternatives: - Coconut milk - Almond milk - Soy milk - Oat milk - Rice milk - Hemp milk - Cashew milk - Hazelnut milk

Dairy Free Products: - Butter - Cheese - Yogurt - Ice Cream

Source: Entrepreneurs hope microbes hold the key to a food revolution, Financial Times, Sept 2019; https://www.ft.com/content/c6eabf26-d49e-11e9-8367-807ebd53ab77

Substitution from Microbials Microbes processed in precision fermentation tanks produce protein which is then used to make dairy and meat substitutes.

Growing Demand

Changing Consumer Preferences

Global Deficit

Plant-Based Alternatives 'A Drop in the Ocean' Per Capita Consumption of Dairy in US 2018 • Despite the rise of plant-based alternatives, dairy still dominates in size; • In volume terms, per capita consumption of dairy milk in US (65 liters p.a.) is ~15 times larger than plant-based alternatives (4.4 liters p.a.);

70.0

65.0

60.0

• While plant-based alternatives account for ~13% of the global milk market and are growing at +9% CAGR (2008-2018): Ê Value-added dairy products (grass-fed, high protein, etc.) have grown at +7.2% CAGR over the same period;

50.0

Ê 41% of milk demand is in Asia Pacific where milk is still one of the most affordable sources of nutrition and has grown at +7% CAGR.

40.0

Dairy Milk consumption is ~15x larger

30.0

This provides a large and growing market for New Zealand dairy exports.

20.0

10.0

0.0 Source: Making milk ‘cool’ again, Rabobank, August 2019 https://services.rabobank.com/publicationservice/download/publication/token/3mWexk35z23mdfanaGLd

4.4 Dairy Milk

Plant-Based Alternatives 37

Growing Demand

Changing Consumer Preferences

Global Deficit

Microbials still a “Distant Future” Despite the current hype, Microbials are still a distant future: • Consumer preference trends indicate a move away from processed food to natural products; • Significant challenges in gaining public and regulatory acceptance for microbials; • High risk/s in genetically engineered production systems; • Time to market for new products comparable to pharmaceuticals; • Mainstreaming not expected in near term.

“A more realistic picture is that synthetics will be part of global diets but the extreme scenario [total replacement of dairy and meat] is implausible.” - Simon Hunter, NBR, 20 October 2019.

“US$ 1 trillion worth of stainless steel required for fermented milk to replace 10% of global dairy milk consumption.” - NZX Dairy Outlook 2019, A Sustainable Dairy Future. Source: Food more important than fiction in livestock debate - Simon Hunter, NBR, 20 Oct 2019: https://www.nbr.co.nz/opinion/food-more-important-fiction-livestock-debate There’s a Huge, Angry Backlash Against Fake Meat - Victor Tangermann, Futurism, 8 Oct 2019: https://futurism.com/angry-backlash-fake-meat

Some of the current commentary is more hysteria than academia – ReThinkX Rebuttal “The story misses some vital points. RethinkX is not accounting for the needs of the consumer. The global trend is toward authentic and healthy food that contributes to experiences and sustainability.” “The model also forgets that food behaviour changes over generations rather than within a single generation. Synthetic foods will, over time, be part of future diets alongside additional plant foods and a balance of dairy, meats and seafood that are critical sources of nutrients. “The impact of the projections is a concern. RethinkX presents a story that undermines the confidence of farmers who feed the world and who will actually be leading the restoration of the environment.” “The capital for replacing livestock with stainless steel farms is in the many trillions of dollars. This will be far more than $US1 trillion for dairy by itself. The true cost of this capex is ignored, as is the likelihood that investors will materialise.” “The assumptions on the biological process are hugely ambitious. They are driven by the IT S-curve without evidence of the underlying biological process. There are gaps in the evidence for the conversion of sugar feedstock to protein, cycle times for fermentation and food science needed to create proteins.” “The projections assume the cost of protein production falls to the marginal cost of sugar, which is the feedstock for fermentation. This leaves limited provision for costs of converting sugar to protein, added ingredients, food safety, labour and capital.” “There are risks with a vast genetically engineered monoculture production system for the sugar feedstock. There are health risks of adding more ingredients such as sodium; undersupplying micronutrients such as calcium, iron or vitamins; and removing microorganisms that support gut health. Ignoring these issues is irresponsible.” “It overlooks the implications for the 2.5 billion people in the world who depend on food as their main source of prosperity.” “A more realistic picture is that synthetics will be part of global diets but the extreme scenario is implausible. In the meantime, the livestock industry must focus on accelerating its investment in solutions that actually deliver better health and environment outcomes.“ Source: Food more important than fiction in livestock debate - Simon Hunter, NBR, 20 Oct 2019

Keith Woodford on the artificial-food debate

Source: https://keithwoodford.wordpress.com/2020/01/13/artificial-food-debate-needs-science-not-science-fiction/

Growing Demand

Changing Consumer Preferences

Global Deficit

Dairy continues to be a widely accepted source of protein and nutrition... Dairy continues to be a major portion of diets around the world

Scientific consensus on the nutritional value of dairy in diets

Source: International Dairy Federation; McKinsey - How the global supply landscape for meat protein will evolve - October 2018. https://www.mckinsey.com/industries/agriculture/our-insights/how-the-global-supply-landscape-for-meat-protein-will-evolve https://www.interest.co.nz/rural-news/103216/keith-woodford-explains-how-artificial-food-debate-has-lost-sight-fundamental

Growing Demand

Changing Consumer Preferences

Global Deficit

Global Supply Continues to Lag Demand â&#x20AC;˘ Dairy production is growing faster than mainstream agricultural commodities (+17%) but not fast enough to meet current and forecast demand; â&#x20AC;˘ The demand growth plus supply shortfall is expected to result in a widening global deficit of 30 million tonnes milk equivalent in 2027 from a 2017 deficit of 6 million tonnes milk equivalent.

Demand 79 MT

Deficit/Gap -30 MT

Demand 47 MT

Deficit/Gap -6 MT

49 MT Supply Supply

Supply

49 MT

41 MT

2017

2027

Source: A winning growth strategy for Dairy, McKinsey, 2019; https://www.mckinsey.com/~/media/McKinsey/Industries/Consumer%20Packaged%20Goods/Our%20Insights/A%20winning%20growth%20formula%20for%20dairy/A-winning-growth-formula-for-dairy-vf.ashx;

Changing Consumer Preferences

Growing Demand

Global Deficit

Increasing Global Dairy Deficit will Drive Price Increases NZRLC forecasts an average farmgate milk price per kgMS between NZ$8.47 â&#x20AC;&#x201C; NZ$9.42 by 2029 (constant currency basis) utilising OECD-FAO projections*. Our assumptions are based on a growth range of +16% to +29% (+1.7% - +2.9% p.a) over the current farm gate milk price of NZ$7.30 per kgMS for 2019/2020**.

FAO Real World Diary Price Index, 1990-2006

FAO Real World Diary Price Index, 2007-present

Average Global Price Projections by OECD-FAO USD per ton 6000

Index = 100 2002-2004 250

5000 200

4000 150

+16% +16% +29%

3000

+22% 100

2000

1000

0 92 94 96 98 00 02 04 06 07

Source: The changing landscape of farming and banking, ASB, 2019; *OECD-FAO Agricultural Outlook 2019-2028 http://www.fao.org/3/ca4076en/ca4076en.pdf ** Fonterra Latest Farmgate Milk Prices; https://www.fonterra.com/nz/en/investors/farmgate-milk-prices.html

Butter Cheese Whole milk powder Skim milk powder

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Growing Demand

Changing Consumer Preferences

Global Deficit

New Zealand is well positioned to meet the Global Deficit with our Free Trade Agreements (FTA) 85% of the global deficit is concentrated in Asian markets - serviced by New Zealandâ&#x20AC;&#x2122;s dairy industry. Dairy Surplus/Deficit in 2017 and 2027 in million tonnes milk equivalent 2017 2027

23 19

18 13

12 5

Surplus

Aus. & NZ

United States 2017 2027

China

Africa

India -3

-10 -15

Deficit

-18 -26

Rest of Asia

C. & S. America 0 -6

-6

-19

-23

Growing Demand

Changing Consumer Preferences

Global Deficit

New Zealand is well positioned to meet the Global Deficit with our Free Trade Agreements (FTAâ&#x20AC;&#x2122;S) New Zealandâ&#x20AC;&#x2122;s Free Trade Agreements Open Doors

In Force Concluded but not in Force Under negotiation Prospective FTAs Suspended FTAs Dairy deficit 2027

-26 -18

-6

-23 -6

Source: A winning growth strategy for Dairy, McKinsey, 2019; Ministry of Foreign Affairs and Trade, 2018 https://www.mckinsey.com/~/media/McKinsey/Industries/Consumer%20Packaged%20Goods/Our%20Insights/A%20winning%20growth%20formula%20for%20dairy/A-winning-growth-formula-for-dairy-vf.ashx;

Summary of Global Dairy Trends

Changing Consumer Preferences

Growing Demand

Global Deficit

GROWING DEMAND

CHANGING CONSUMER PREFERENCES

GLOBAL DEFICIT

• Demand for dairy is growing;

• In addition to growing demand, global consumer preferences are changing in favour of natural, healthy, responsible and sustainable products;

• Global dairy production is not enough to meet the demand;

• Driven by a growing global population and rising incomes.

• Major producers not aligned with changing consumer preferences: Ê

Feed-based, contained dairy systems like the ones found in North America; are poor in animal welfare;

Fragmented and inefficient industry in emerging

• The growing global deficit will drive commodity price increases; • New Zealand is well positioned to meet demand with grass-fed products, efficient production and FTAs with deficit countries.

markets has low focus on animal welfare, environmental footprint. 46

THE NEW ZEALAND STORY

NEW ZEALAND'S SUCCESS IN DAIRY IS ATTRIBUTABLE TO

+ its natural conditions

its long history of efficient dairy production

Its competitive advantage is maintained by a continued focus on innovation and sustainability. 48

New Zealand's Competitive Advantage

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

New Zealand's Competitive Advantage

NATURAL ENVIRONMENT

EFFICIENT & INNOVATIVE INDUSTRY

• Temperate climate, good soil and consistent rainfall provides ideal conditions for pasture growth;

• New Zealand has a long history of excellence in dairy farming;

• Pasture-based dairy farming provides a cost advantage over feedbased systems; • Grass-fed dairy is a premium product and well aligned with changing customer preferences.

• This has resulted in constantly improving productivity and efficiency; • Our innovative Agri-tech sector supports the “New Zealand Advantage”; • New Zealand is a world leader in risk mitigation strategies.

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Natural Environment – Ideal for Dairy Farming • New Zealand’s temperate climate, consistent rainfall and adequate sunshine make it ideal for pasture based farming because grass can grow all year subject to seasonal variations; • As an island nation with low humidity, disruption in production by pests, insects and disease are fewer. Moderate winds promotes free range grazing; • Soil in New Zealand is predominantly volcanic loams which are the most fertile of soils – ideal for intensive dairy farming.

Typical Pasture Growth of NZ and Mean NZ Milk Production Per Month Milk Production Pasture Growth NZ

80 70

2500

60 2000

50 40

1500

1000

20 500

Pasture Growth kg DM/ha/day

Mean NZ milk production/month 2006-2016

3000

New Zealand Mean Annual Sunshine Hours, 1971-2000

New Zealand Mean Annual Temperature (°C), 1971-2000

New Zealand Mean Annual Rainfall (mm), 1971-2000

Sunshine (hours)

Temperature (°C)

Annual Rainfall (mm)

900 -1400 1400-1600 1600-1800 1800-2000 2000-2200 2200-2600

<2 2.1-4 4.1-6 6.1-8 8.1-10 10.1-12 12.1-14 14.1-16 16.1-18

0 JUN

JUL

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

APR

MAY

Kilometres 0 50100 200 300 400 500

<500 500-750 750-1000 1000-1250 1250-1500 1500-2000 2000-4000 4000-10000

Kilometres 0 50100 200 300 400 500

(Refer Appendices for larger format of this chart - Page 149)

Source: DairyNZ (Ruakura - 16.4t DM/ha/year); DCANZ 2006-2016 (www.dcanz.com) https://equella.lincoln.ac.nz/prod/file/fc3f8e54-f6d1-4453-9486-cde9d1d98920/3/Why%20is%20NZ's%20Climate%20so%20good%20for%20Agriculture.pdf https://niwa.co.nz/education-and-training/schools/resources/climate/overview https://www.ifama.org/resources/Documents/v19ib/14_Shadbolt.pdf

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Natural Environment - Lower Cost

in USD/100 kg Solid Corrected Milk (SCM; 4,0% fat, 3,3% protein)

> 60 50 <= 60 40 <= 50 30 <= 40 20 <= 30 0 <= 20 no data

*International Farm Comparison Network (IFCN): https://ifcndairy.org/wp-content/uploads/2018/10/Dairy-Report-Article-2018.pdf **International Food and Agribusiness Management Review (IFAMA): https://www.ifama.org/resources/Documents/v19ib/14_Shadbolt.pdf

New Zealand’s pasture-based system results in lower cost of milk production than feed-based systems; • IFAMA reported that average cost of production for New Zealand in 2014 was -39% lower than EU and -30% lower than US*; • IFCN reported that average cost of production for New Zealand in 2017 was -40% to -50% lower than EU and US**.

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Natural Environment - Premium Product Grass-fed dairy is well aligned with changing consumer preferences for healthier options, animal welfare and lower carbon footprints. â&#x20AC;&#x153;Consumers could pay a premium of 30 to 50 percent or more for grass-fedâ&#x20AC;?

Carbon footprint per gram of protein (gm CO2 eq./gm protein) 120

Tim Joseph, founding farmer and CEO of Maple Hill Creamery

Grams CO2 eq. per gram protein

100

60 40

Cow's Milk World Average

Soy-milk

20 0 Cow's Milk Cow's Milk Australia & Europe New Zealand

Cow's Milk North America

Cow's Milk South and Central America

Cow's Milk Asia

Cow's Milk Africa

Almond, Coconut Milk

Source: NZMP; Fonterra

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Efficient & Innovative - Long History Over two centuries of dairy farming excellence driving efficiency and productivity.

1814

1880

1940

1980

2000

2010

2019

The first cattle (Shorthorns) introduced in New Zealand.

Refrigeration technology enables NZ farm exports Cream separators for skim milk. First cooperatives and factories established.

Milk tankers start collection runs, Herringbone milking shed, Commercial artificial insemination 1.7 million cows, 40,000 farmers and 409 dairy factories in 1945.

Anchor invents spreadable butter National Dairy Herd. Database operational.

Innovation age attracts global investors. Fonterra formed after mega merger controlling 95% of milk volume. Robotic milking (Merlin).

NZ Dairy industry free of Enzootic Bovine Leukosis. Zero lactose milk launched.

NZ Dairy exports valued at NZ$18 Billion.

First dairy exports from NZ - Cheese to Sydney.

Mechanical milking machines introduced. Over 600 factories operational. Product innovation into infant formula, milk powders. Dairy Board and NZDRI* formed.

Rotary milking platforms. Cheddarmaster â&#x20AC;&#x201D; automation of cheese making. 2.3 million cows, 25,000 farmers, 229 dairy factories in 1969.

World first - Long-Last Liquid (LLL) semen introduced by LIC. Beginning of DNA parentage verification 2.7 million cows. 15,000 farmers & 27 factories in 1994.

Cooperative for livestock improvement established. Over 5 million cows in 2005.

Milk fingerprinting technology.

1840

1920

1960

1990

2005

2015

* NZDRI = New Zealand Dairy Research Institute.

Natural Environment

World Leader in Risk Management Systems

Efficient & Innovative

World Leading Dairy Producer & Exporter

Efficient & Innovative - Always Improving The New Zealand dairy industryâ&#x20AC;&#x2122;s history of innovation continues to drive its productivity, efficiency, and value.

SINCE 1990: 23% Increase in Cow Productivity and 73% More Revenue Per Cow Since 2001

INCREASE IN YIELD PER COW

43%

INCREASE IN EXPORT REVENUE PER KGMS

60%

INCREASE IN YIELD PER HECTARE

78%

INCREASE IN LABOUR EFFICICENCY

Source: NZIER, Statistics New Zealand, Dairy NZ, DCANZ DairyNZ; How does the dairy sector share its growth? DCANZ, NZIER, 2018 https://nzier.org.nz/static/media/filer_public/9f/0e/9f0e40ea-0178-4ef9-950f-5546ef483eec/dcanz_2018_final.pdf

Inflation adjusted prices

Export real NZD per cow (RHS) Milk tonnes per cow (LHS)

4.5

2.820

3000

4 3.5

Milk tonnes per cow (LHS)

42%

3.92

3 2.5

2500

3.19 2000 1.626 1500

2 1.5

1000

1 500

0.5

0 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Efficient & Innovative â&#x20AC;&#x201C; Focus on Agri-tech New Zealandâ&#x20AC;&#x2122;s well developed Agri-tech sector supports dairy industry excellence and has strong government support for sustaining the Agri-tech sector. PRIVATE AGRI-TECH

GOVERNMENT SUPPORT

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Source: AgritechNZ - Powered by Place: https://vimeo.com/341443888

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Dairy Industry Risks - Summary

ENVIRONMENTAL RISKS

SOCIAL RISKS

Intensive dairy farming creates environmental issues:

Perception of social costs of intensive dairy farming manifests in:

• Emissions from animals;

• Urban-rural divide;

• Contamination of streams and rivers with effluents;

• Lack of community support;

• Excessive water usage; • Nutrient losses from soil; • Threats to biodiversity.

• Loss of social license to operate.

POLITICAL RISKS Failure to act on environmental and social risks further cause political risks: • Stringent environmental standards; • Increased costs of compliance; • Fewer consents for new farm conversions.

BIOSECURITY

CLIMATE CHANGE

In addition, NZ’s natural competitive advantage is at threat by new pests and diseases:

NZ’s pasture based dairy is also at threat from climate change impacting:

• Reducing farm productivity; • Impacting animal health; • Limiting exports;

• Pasture performance and composition; • Animal performance and heat stress; • Pressure on water usage.

• Requiring costly control programs.

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Risk Mitigation - Environmental On-Farm Emissions With high and growing global dairy demand New Zealand is the best source carbon-wise for Dairy as it has the lowest footprint. New Zealand’s Dairy Industry is focused on reducing its overall environmental impact which includes on-farm emissions: • As global population grows food production must grow to meet nutrition demand (refer slide 9); • All food production has a carbon footprint across its value chain, manifesting in various forms (Carbon Dioxide, Methane, Nitrous Oxide, etc.) and represented by carbon equivalents;

• New Zealand is the best source globally for dairy: Ê Currently, New Zealand dairy has a lower carbon footprint than feed-based dairy and major plant-based alternatives; Ê Within New Zealand, best-practice farming initiatives continue to lower the industry’s carbon footprint, (e.g. managing Dry Matter Intake); Ê Additionally, reducing on-farm emissions is a key focus area for environmental research – Selective Breeding, Methanogen Vaccines and Inhibitors show promise.

Grams CO2 eq. per gram protein

• While global appetite for food is rising, tolerance for carbon emissions is declining, impacting growth prospects of production. Consumers are increasingly demanding natural, healthy and nutrient-dense food choices produced with a low carbon footprint; Carbon footprint per gram of protein (gm CO2 eq./gm protein) • Dairy is a widely-accepted source of nutrition and has a significant role in global diets due to its nutritional value - infant formula, geriatric health, protein-rich diet, 120 flavour, etc. Increasing demand for dairy is well documented and accordingly 100 93 dairy production must keep-up; 80

60 40

Cow's Milk World Average

Soy-milk

20 0 Cow's Milk Cow's Milk Australia & Europe New Zealand

Cow's Milk North America

Cow's Milk South and Central America

Cow's Milk Asia

Cow's Milk Africa

Almond, Coconut Milk

Source: The Science of Food Security (2018); https://www.nature.com/articles/s41538-018-0021-9.pdf Intergovernmental Panel on Climate Change (IPCC); InsideClimate News ; https://insideclimatenews.org/news/27082019/12-years-climate-change-explained-ipcc-science-solutions; Fonterra: https://www.dairytomorrow.co.nz/wp-content/uploads/2017/12/dairy-strategy-2017-A4-booklet-Part3.pdf

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Risk Mitigation - Environmental On-Farm Emissions - where do they come from? New Zealand has a higher relative proportion of Agricultural based emissions as we export (feed others) and have lower electricity production emissions with our Hydro electricity. New Zealandâ&#x20AC;&#x2122;s Greenhouse Gas Emissions as at April 2019

Methane emissions from cows account for majority of dairy farm emissions; Methane is a relatively more potent greenhouse gas and has a higher value for carbon equivalent*; Methane has a lower atmospheric life and it breaks down / gets absorbed relatively faster*.

WASTE 5.1% INDUSTRIAL PROCESSES 6.1%

AGRICULTURE 48.1% Methane

Fugitive emissions Electricity generation Other

2.4%

18.3%

Dairy cattle 22.5%

Nitrous oxide

4.4%

4.2%

this into the air.

5.5%

Manufacturing & construction

8.6% Sheep 12.7%

1.8% Other

Transport

19.7%

ENERGY 40.7% 17.9% Road transport

Other 4.7%

Beef cattle 8.1%

Methane

10.3%

eat Nitrous oxide Methane Nitrous oxide

2.4%

eat

6.6% 1.5%

. *Global Warming Potential (GWP) of methane = 21 and Atmospheric life is 12 years (compared to 50-200 years for CO2) Source: Iowa State University: https://www.extension.iastate.edu/agdm/articles/others/TakMar08.html

Risk Mitigation Environmental On-Farm Emissions what are we doing about reducing them further? New Zealand has the lowest emissions globally for Dairy and is reducing emissions further

WHAT

WHY

NZ contributes 0.17% of emissions globally but is higher than average on a per capita basis.

Given our low emissions base and export-based economy, i.e. we produce food for others albeit with a lower carbon footprint;

New Zealand has three current greenhouse gas emissions reductions targets:

Our 2030 target is our commitment to the Paris Agreement which aims to limit the global temperature increase to 1.5 to 2.0 C above pre-industrial levels in this century;

•

Reduce emissions to 5 per cent below 1990 levels by 2020 (On track to meet);

•

Reduce emissions to 11 per cent below 1990 levels (30 percent below 2005 levels) by 2030;

•

Net Zero emissions of all greenhouse gases (except methane) by 2050.

Net Zero does not apply to methane from dairy (biogenic methane), targets for which include: •

10% reduction below 2017 levels by 2030 which is possible with current best practices;

•

24%-47% reduction below 2017 levels by 2050.

Our 2050 target is a domestic target to ensure that New Zealand can make a smooth transition to a low-emissions future under the Climate Change Response (Zero Carbon) Amendment Act 2019;

Biogenic methane is produced from biological (plant and animal) sources. This is carbon recently derived from CO2 present in the atmosphere; Unlike CO2, methane is a short-lived greenhouse gas and in equilibrium, it can be emitted at a stable rate without increasing its concentration in the atmosphere;

This implies that highly productive dairy land will be retained, while low productivity land will be retired for Beef/ Forestry/Sheep.

This retirement is how New Zealand will meet our targets and this will also drive the value of sustainable productive land;

Productive dairy land will become even more valuable and NZRLC intends to target these farms.

Global demand for food production from sustainable sources will result in increasing value for productive dairy land in New Zealand.

Source: New Zealand’s Greenhouse Gas Inventory, 1990-2017, published April 2019 (Percentages in the graph may not add up to 100 due to rounding) Source: Ministry for Environment; https://www.mfe.govt.nz/sites/default/files/media/Climate%20Change/emissions-profile-infographic.pdf https://www.mfe.govt.nz/sites/default/files/media/Climate%20Change/climate-change-response-zero-carbon-amendment-bill-summary.pdf

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Risk Mitigation - Environmental Surface Water Contamination New Zealand’s Dairy Industry is focused on reducing its overall environmental impact which includes surface water contamination: • New Zealand dairy farmers are tackling contamination of streams and rivers proactively and have made significant progress on their commitment to sustainable farming; • Sustainable Dairy - Water Accord was signed in 2013 and represents a five-year commitment by the New Zealand Industry to improve New Zealand’s waterways; • Continuous improvements include fencing of waterways, riparian management, bridges, culverts, nutrient management plans, effluent assessment, and effluent management; • Over 11,000 farmers are part of the Accord and are committed to improving water quality in streams, rivers, and maintaining social license.

Riparian Management

98%

of (accord) waterways have dairy cattle excluded. (24,744km of Accord waterways)

Riparian management plans developed for

52%

of dairy farms with waterways.

*98.3% **99.8% Source: Dairy NZ - https://www.dairynz.co.nz/media/5791875/water-accord-progress-report-5-years-on.pdf”

100%** of stock crossing points have bridges or culverts to exclude dairy cows.

177

Rural professionals are now Certified Nutrient Management Advisors, with a further 70 professionals going through the certification process in the 2017/2018 season. 62

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Risk Mitigation - Social Social risks are mitigated by the industry’s active management of social perception and social licence.

INCREASING TRANSPARENCY

SUPPORTING COMMUNITIES AND GIVING BACK

Fonterra Open Gates, DairyNZ school farm visits

Fonterra Grass Roots Fund

https://www.youtube.com/watch?v=vPXwsSq96pM&feature=youtu.be https://www.youtube.com/watch?v=ssDONUSFTio&feature=youtu.be

WORKING WITH SCHOOLS Dairy NZSchools – Teacher toolkit, Rosie’s World, Fonterra Milk for Schools & Kickstart Breakfast

https://www.fonterra.com/nz/en/what-we-stand-for/ community.html https://www.dairynz.co.nz/about-us/education/dairynzschools/ https://www.dairynzschools.co.nz/teachers-resources

https://www.fonterra.com/nz/en/what-we-stand-for/community.html

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Risk Mitigation - Political Political risks to the dairy industry are mitigated by its importance to the overall economy: Dairy contributes

$8.2b

Contribution to GDP in NZ$Billion

to national GDP (3.1%) and accounts for as high as 10% of GDP in some regions

Dairy jobs pay better on average than other agriculture and food processing sectors.

+6% +43%

$6.27b

$1.93b

Dairy Farming

Dairy Processing

$18.1b in Exports

+3%

employer in 9 districts

growth in Dairy employment p.a since 2000 as compared to +1.8% for all other industries;

46,000

5,000

10%

jobs in diary industry

new jobs every year

of GDP of some regions

higher than other farming and

higher than other food processing jobs

Source: DairyNZ; How does the dairy sector share its growth? DCANZ, NZIER, 2018 https://nzier.org.nz/static/media/filer_public/9f/0e/9f0e40ea-0178-4ef9-950f-5546ef483eec/dcanz_2018_final.pdf

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Risk Mitigation - Biosecurity Biosecurity risks are mitigated by committed government attention.

Strategy in Place:

Strategy in Action:

https://www.mpi.govt.nz/dmsdocument/29258-mycoplasma-bovis-update-full-details-infographic

Source: https://www.biosecurity.govt.nz/dmsdocument/14857

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

Risk Mitigation - Climate Change High focus on practical and evidence-based transition solutions for tackling climate change risks.

DETAILS ON REGIONAL IMPACT AND INITIATIVES IN ANNEX

Source: Ministry for Primary Industries, Ministry for Environment, ClimateCloud http://climatecloud.co.nz/CloudLibrary/Climate%20Change_Dairy%20v1.5.pdf https://www.beehive.govt.nz/release/world-first-plan-farmers-reduce-emissions

Natural Environment

World Leader in Risk Management Systems

Efficient & Innovative

World Leading Dairy Producer & Exporter

Natural Environment

Culminating in New Zealand As World Leading Dairy Producer and Exporter... • New Zealand is the world’s largest dairy exporter and accounts of 1/3rd of global dairy trade; • New Zealand dairy production has grown by +215% in volume terms since 1990; • New Zealand dairy exports have grown by +677% in value terms since 1990.

New Zealand Dairy Production

Value of New Zealand Dairy Exports 1840

2000 1800

16.0

1600

12.0

6.0

Source: NZ Dairy Statistics 2017-2018; DairyNZ https://www.dairynz.co.nz/media/5790451/nz-dairy-statistics-2017-18.pdf

2018

2017

2015

2016

2014

2013

2011

2012

2009 2010

2007

2008

2006

2004

2005

2003

2001

2002

1999

2000

1997

1998

1995 1996

2016/17 2017/18

2014/15

2015/16

2013/14

2011/12

2012/13

2010/11

2009/10

2007/08

2008/09

2006/07

2004/05 2005/06

2003/04

2002/03

2000/01 2001/02

1999/00

1998/99

1996/97

1997/98

1995/96

1994/95

0.0 1993/94

0 1991/92

2.0

1992/93

200

2.2

1994

4.0

400

6.3

1993

600

8.0

1991

599

10.0

1992

1000

1990

Export value ($ billions)

981

1200

1990/91

in million kg

13.9

14.0

1400

800

17.1

18.0

Source: DairyNZ; How does the dairy sector share its growth? DCANZ, NZIER, 2018 https://nzier.org.nz/static/media/filer_public/9f/0e/9f0e40ea-0178-4ef9-950f-5546ef483eec/dcanz_2018_final.pdf

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

..as well as a world leader in sustainable practice

Source: NZ Story Toolkit; Ministry for Primary Industries

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

.... and a great place to invest in Agribusiness

Source: NZTE: https://www.youtube.com/watch?v=zhfbevKVgJg

Summary of The New Zealand Story

Natural Environment

Efficient & Innovative

World Leader in Risk Management Systems

World Leading Dairy Producer & Exporter

THE CURRENT INVESTMENT OPPORTUNITY IN NZ RURAL LAND

Global Deficit + High Quality NZ Milk Drives Land Value Forecast for 2019/2020 NZ$ per kgMS

• Long term averages illustrate the growing value of New Zealand’s high-quality milk;

Source

• Average milk price has grown from NZ$4.80 per kgMS (1999-2009) to NZ$6.39 per kgMS (2009-2019);

Westpac

NZ$ 7.00

8-Apr-20

Rabobank

NZ$ 7.35

17-Mar-20

ANZ

NZ$ 7.15

1-Apr-20

• Projected increases in global commodity prices indicate an average milk price in New Zealand between NZ$8.47 - NZ$9.42 over the next decade (+1.7% - +2.9% p.a);*

ASB

NZ$ 7.30

8-Apr-20

BNZ

NZ$ 7.30

9-Apr-20

AgriHQ

NZ$ 7.90

5-Nov-19

• New Zealand dairy’s strong fundamentals support growing industry value over the long term.

Fonterra

NZ$ 7.00 - NZ$ 7.60

18-Mar-20

• Current milk price forecasts as at April 2020 for 2019/20 season range between NZ$7.10 – NZ$7.90;

Issue date

NZ$8.47 - NZ$9.42

NZ$6.39 NZ$4.80

Average price per kgMS for

1999-2009

Average price per kgMS for

2009-2019

Source: RBNZ Financial Stability Report 2019, Fonterra Milk Price Statement 2019, 2020 forecasts of ASB, Rabobank, ANZ, BNZ, Westpac, Fonterra, AgriHQ os of 30th April 2020. * OECD-FAO Agricultural Outlook 2019-2028: http://www.fao.org/3/ca4076en/ca4076en.pdf;

Average price per kgMS for

2019-2029* 72

Growing Profitability of Dairy Farms • Dairy farm profitability is increasing with growth in milk prices outstripping growth in costs; • Farm Working Expenses (FWE) have been reasonably stable over the past decade in the range of NZ$3.60 - NZ$4.20 per kgMS; • Most anticipated cost-increasing factors have already been built into the current levels (i.e. NZ$4.20 per kgMS); • The primary risk is from decreased milk production rather than dramatic increases in fixed costs, which raises the FWE per kgMS. This is mitigated by the type and location of the farm; • Assuming an inflationary increase* on FWE, our milk price forecast will result in an Economic Farm Surplus (EFS) of NZ$4.27 - NZ$4.52 per kgMS in 2029, which is a growth of +52% to +61% from EFS in 2019;

Growing farm profitability (EFS) will increase land value over time.

Projected Farm Working Expenses and Economic Farm Surplus 10 Economic Farm Surplus (EFS) Farm Working Expenses (FWE)

NZ$ per kgMS

8 7 6 5 4

3.74 1.74

2.96

3.86

3.56

3.14

2.64

3.78 2.25

4.27

2.96

2.80

3.73

4.20

201617

201718

201819

PROJECTED RANGE FOR 2029

2.60 0.88

3 2

4.52

4.06

3.95

4.13

4.33

201213

201314

4.07

3.64

4.90

1 0 200809 200910 2010011 201112

201415 201516

Source: RBNZ, NZStats; *Average CPI in New Zealand is 1.53% (2009-2019) https://www.rbnz.govt.nz/monetary-policy/inflation

Despite A Positive Macro Story Dairy Land Supply is Shrinking • Traditionally, growth of farmgate milk prices has resulted in more land being repurposed for dairy farming; • This is no longer the case due to government regulations restricting new farm conversions to dairy; • Forecasts indicate a reduction of dairy farmland to 1.6 million hectares in 2025 (down -9% from 2019 levels).

Total Effective Hectares 2.00

-9%

1.80 1.60

Millions

1.40 1.20 1.00 0.80 0.60 0.40 0.20

Source: NZX Dairy Outlook 2019

2025

2018 2019

2017

2016

2015

2014

2013

2012

2010 2011

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

0.00

Source: NZX Dairy Outlook 2019, A Sustainable Dairy Future

Price Outlook + Land Supply => Should Result in Dairy Land Value Appreciation

Limited Supply of Dairy Land

Increasing Prices for Dairy Land

2.00 45 000

1.80

40 000

1.60

35 000

Median price NZD per hectare

1.40 1.20 1.00 0.80 0.60

10 000

Source: Source: RBNZ Financial Stability Report 2019, Fonterra Milk Price Statement 2019, 2020 forecasts of ASB, Rabobank, ANZ, BNZ, Westpac, Fonterra, AgriHQ os of 24th April 2020; NZX Dairy Outlook 2019, A Sustainable Dairy Future; REINZ *OECD-FAO Agricultural Outlook 2019-2028.

2019 2020 2021 2022 2023 2024 2025

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

1999

1998

1997

1996

2018 2019 2020 2021 2022 2023 2024 2025

2017

2016

2015

2014

2013

2012

2010 2011

2009

2008

2006 2007

2004

2005

2003

2002

2001

2000

1999

1998

1997

1996

0.00 Expected average price per kgMS for 2019-2029*

2006

5 000

0.20

2005

Average for 2009-2019

15 000

2004

Average for 1999-2009

NZ$8.47 ď&#x161;ş NZ$9.42

20 000

2003

NZ$6.39

25 000

2001 2002

NZ$4.80

0.40

30 000

2000

Millions

Increasing Milk Prices

But this is not the case at present... Dairy Land - A traditionally sound long-term asset is now under considerable price pressure as a combination of new factors has impacted prices.

Median Dairy Farm Prices Per Hectare*

RBNZ & OIO Policy Changes Median NZ$ per hectare of dairy farm land

$50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000

CAGR ï&#x161;º8.19% P.A.

CAGR +5.88% P.A.

$15,000 $10,000 $5,000 $0

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 2019

Source: REINZ Data 1996-2019

New Factors Impacting an Attractive Long-Term Asset

Overseas Investors Blocked â&#x20AC;&#x153;Foreign Buyer Banâ&#x20AC;?

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Overseas Buyers Largely Blocked from Acquiring New Zealand Land A “Foreign Buyer Ban” Ministerial directive issued in November 2017 has severely constrained the ability of foreign investors to access New Zealand Dairy Farmland;

Overseas Investment Office (OIO) approvals granted to overseas buyers for rural land are down over -50% from 2014 highs. Approved Applications 2013-2018 Overall Agri-business

150

120

Applications

0 2013

2014

2015

2016

2017

2018

Source: KPMG FDI Report March 2019

Overseas Investors Blocked â&#x20AC;&#x153;Foreign Buyer Banâ&#x20AC;?

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Foreign Direct Investment (FDI) into Dairy has Declined Considerably FDI in Agri Business 2013-2015 Other Agribusiness 18%

FDI in Agri Business 2016-2018

Wine 11%

Other Agribusiness 10%

Wine 12%

Beef & Sheep 7%

Horticulture 9%

Beef & Sheep 21%

Dairy 38%

Forestry 36%

Dairy 12%

Horticulture 10%

Forestry 16%

Source: KPMG FDI Report March 2019

Overseas Investors Blocked â&#x20AC;&#x153;Foreign Buyer Banâ&#x20AC;?

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Banks are Reducing Credit to the Sector $ Dairy Sector has High Reliance on Debt

Dairy Farm Balance Sheets are Currently Stressed

Banks are Reducing Exposure and Demanding Principal Repayments

RBNZ has proposed changes to Bank Capital Requirements*

But Farms Barely Covering Interest Payments

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Dairy Sector has High Reliance on Debt Funding • Since 2003, dairy debt has grown +267% while total overall loans grew much slower +192%; • Dairy debt now accounts for 9% of overall loans and 65% of agriculture loans; • Debt has been the primary source of capital for Dairy Farms in New Zealand;

Debt per kgMS has grown from NZ$ 9.48 in 2003 to NZ$ 21.99 in 2019.

Growth of Dairy Sector Debt

Composition of Bank Lending

Dairy loans Debt/kgMS

45 000

24%

40 000

60%

35 000

14%

25 000 20 000 15 000 10 000 5 000

Source: RBNZ Financial Stability Report November 2019

2019

2017 2018

2016

2015

2013 2014

2012

2011

2010

2009

2008

2007

2006

0 2005

1% 1%

2004

2003

Household Business Other Agriculture Dairy Sheep and Beef Horticulture Other Agriculture

NZD million

30 000

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Dairy Farm Balance Sheets are Currently Stressed • The dairy sector as a whole is very stretched financially - Debt-to-Assets ratio for the owner-operated dairy farms has grown from 42% in 2009 to 52% in 2018; • A large group of dairy farms that are heavily indebted - 35% of outstanding debt is held by highly indebted farms (i.e. >NZ$35 debt per kgMS); • Options for relief are limited: Ê High Debt-to-Income (DTI) farms are struggling to service debt despite strong milk prices; Ê Operators who may have traditionally been potential acquirers have high debt levels themselves.

Dairy Sector Debt Debt per kgMS produced % of debt held by highly indebted farms (RHS)

2013

2014

2015

2016

2017

2018

Dairy Agriculture

400%

% Of Debt Held By Highly Indebted Farms

NZ$ per kgMS

Agriculture Sector Debt-to-Income Ratio 400%

300%

200%

100%

2000

2003

2006

2009

2012

2015

2018

Source: RBNZ Financial Stability Report May & November 2018; DairyNZ Economic Survey.

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Concerned about resilience - RBNZ has proposed changes to bank capital requirements • RBNZ proposes Tier1Capital requirement to be doubled from 8.5% to 16% of risk-weighted assets (RWA) over a seven-year transition period*; • For Banks, maintaining the status quo is not an option - Banks can either increase their Tier1Capital or reduce their risk-weighted assets.

OPTION 1

OPTION 2

RBNZ proposes Tier 1 capital requirement to be doubled from 8.5% of risk-weighted REDUCE RWA INCREASE TIER 1 CAPITAL assets, to 16 percent* over aCURRENT TIER 1 CAPITAL TO MEET CURRENT RWA TO MEET five-year transition period This option would result in: This option would require banks to reduce risk profile of loan book by: • Decreased profitability on agriculture loans which are already low • RBNZ Decreasing exposure to sectors/borrowers RBNZ initiates review of proposes higher Public consultation RBNZ decision bank capital framework bank capital ends, submissions expected returning** (and/or); with higher risk profile; requirements to make received are reviewed the banking system

by RBNZ

resilient • more Significantly increasing principal repayments.

• Pass on costs by increasing interest costs for farmers (not viable). Dec. 2017

Dec. 2018

May 2019

Dec. 2019

The only viable option for banks is to reduce RWA by reducing total dairy debt which they have already begun to do. *16% for ‘systemically important’ banks and 14% for all other banks; Although regulatory minimum is 8.5%, banks currently hold ~13.5% of their risk-weighted assets as Tier 1 Capital. RBNZ Capital Review Decisions 2019; https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Policy-development/Banks/Review-capital-adequacy-framework-for-registered-banks/decisions/Capital-Review-decisions.pdf?revision=ebc7cac0-a0ac-4ac4-b079-f7737227e719 https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Policy-development/Banks/Review-capital-adequacy-framework-for-registered-banks/decisions/Capital-Review-guide.pdf?revision=179d7d6c-bad6-47e2-8883-b53b16184e5c&la=en **Agricultural lending is one of the lowest returning sectors for bank lending - Summary of Submissions, July 2019, RBNZ. https://www.rbnz.govt.nz/-/media/ReserveBank/Files/regulation-and-supervision/banks/capital-review/submissions/Summary-to-submissions-for-ratio-paper.pdf?revision=40214835-c403-4255-ab66-625b37a0fd31&la=en

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Banks are Reducing Exposure and Demanding Principal Repayments • Banks are increasingly requiring higher interest, principal repayments and higher profitability for new loans; • Since December 2016, the share of “interest only” loans has decreased from 67% to 58% while “principal & interest” loans have increased from 8% to 16%; • Credit growth to the dairy sector has declined to below zero, while lending to other agriculture sectors has grown steadily.

Dairy Sector Debt by Type Revolving credit

100%

Agriculture Credit Growth Interest only

Principal & interest

90%

20%

Dairy Other Agriculture Dairy H2 2019

16%

80% 70%

12%

60%

50% 40%

30% 20%

10%

JUL2018

SEP2019

MAY 2018

JAN2018

MAR 2018

SEP2018

NOV2018

JUL2018

MAY2018

JAN 2018

MAR2018

SEP2017

NOV 2018

JUL 2017

MAY 2017

JAN 2017

MAR 2017

NOV 2016

SEP2016

JUL 2016

MAY2016

MAR2016

4% JAN2016

AUG 2019

JUN 2019

APR 2019

FEB 2019

DEC 2018

OCT 2018

AUG 2018

JUN 2018

APR 2018

FEB 2018

DEC 2017

OCT 2017

AUG 2017

JUN 2017

APR 2017

FEB 2017

DEC 2016

Source: RBNZ

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Farmers unable to pay = Rising NPLs • Banks are increasingly requiring higher interest, principal repayments and higher profitability for new loans; • Non-Performing Loans (NPLs) are rising - a +300% increase since Jan-2015; Three times as many loans are currently classified as “potentially stressed”*; • Heavily indebted dairy farmers are barely covering their interest payments despite relatively strong milk prices.

Dairy Non-Performing Loans 3.50

% of total dairy loans

3.00 2.50 2.00 1.50 1.00 0.50

JAN2016 MAR2016 MAY2016 JUL 2016 SEP2016 NOV 2015 JAN 2016 MAR 2016 MAY 2016 JUL 2016 SEP2016 NOV 2016 JAN 2017 MAR2017 MAY2017 JUL2017 SEP2017 NOV2017 JAN2018 MAR 2018 MAY 2018 JUL2018 SEP2018 NOV2018 JAN2019 MAR2019 MAY2019 JUL2019 SEP2019

0.00

Source: RBNZ *9% of total dairy loans are classified as “Potentially Stressed” and 15% are classified as “Closely Monitored”

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Historical Precedent/s The combination of high farm debt and constrained access to credit have impacted land prices before, such as in the 1980’s rural downturn. Annual Rate of Growth of Rural Land Values and Outstanding Farm Credit 45% 40%

Farm lending Rural land price

35% 30% 25% 20% 15% 10% 5% 0% 5% 10% 15% 81 82 83 84 85 86 87 87 89 90 91 92 93 94 95 96 97 98 99 00 01

Source: RBNZ https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/1986/1986dec49-10theruraldebtproblem.pdf https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2002/2002jun65-2.pdf?revision=46b8920e-48ce-4e29-9f4a-f6a4b6435160

Overseas Investors Blocked â&#x20AC;&#x153;Foreign Buyer Banâ&#x20AC;?

Widespread Negative Sentiment on the Sector

Banks Reducing Credit to the Sector

Widespread Negativity on the Sector, Despite Attractive Macro Story

Southland Federated Farmers vice-president Bernadette Hunt speaks about issues faced by farmers in New Zealand https://media.stuff.co.nz/video/ production/1568259154996-hunt.mp4

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Leading to Dairy Farm Sales coming to a Grinding Halt • The confluence of these externalities has resulted in a lack of capital for a fundamentally attractive long-term asset; • Dairy farm prices have declined by -16% since 2017* (OIO and RBNZ policy changes) due to a combination of recent negative factors; • Dairy farm sales volumes are grinding down to historical lows; Ê Farm sale volumes in 2019 are -30% lower than in 2016; Ê REINZ data for 12 months preceding October 2019 shows that it takes +60%; longer to sell (110 days) as compared to 2016 (70 days). • The grinding halt has resulted in a decline in prices which we believe presents a potentially attractive entry price point for large scale farm acquisition.

Median Dairy Farm Prices Per Hectare*

RBNZ & OIO Policy Changes Median NZ$ per hectare of dairy farm land

$50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000

CAGR +5.88% P.A.

$15,000 $10,000

CAGR 8.19% P.A.

$5,000 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 2019

Source: REINZ; *Dairy Farm Median Land Prices for quarter ending Aug 2019 over quarter ending Aug 2017. Dairy farm prices referened to in the chart are median land prices which is the midway point of sale price in a 3-month period. Median is a better indicator for market trend for land prices. Outliers and skew have a lesser impact on median when compared to simple averages;

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Price Decline Provides Opportunity • Dairy farm prices have declined by -16% since 2017* (OIO and RBNZ policy changes) due to the combination of recent negative factors as highlighted; • NZRLC believes it can acquire dairy land at an even greater discount (around -26% to -38% lower than 2017 levels) for large scale farms (100+ h.a.); • NZRLC’s ability to acquire farms at a further discount to 2019 levels offers the potential for attractive NTA growth in the future.

Median Dairy Farm Prices Per Hectare* 2017 levels Pre OIO and RBNZ policy changes

Current price levels for dairy farms**

NZRLC indicative price levels for comparable farms***

Median NZ$ per hectare of dairy farm land

$50,000

16%

$40,000

26% to -38%

$30,000

$20,000

This would take us back to ~2007 prices

$10,000

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: REINZ; *Dairy Farm Median Land Prices for quarter ending August 2019 over quarter ending August 2017. Dairy farm prices referenced to in the chart are median land prices which is the midway point of sale price in a 3-month period. Median is a better indicator for market trend for land prices. Outliers and skew have a lesser impact on median when compared to simple averages; **The dataset is smaller - Sale volume data 13 farms have been sold in August 2019 vs 20 farms in August 2017; ***NZRLC indicative price levels is based on median all farm data; average production levels and does not factor in regional and site-specific differences.

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Median NZ$ per hectare of dairy farm land

$50,000

$40,000

Estimated range for potential capital appreciation***

$30,000

$20,000

$10,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2029

Source: REINZ; *Dairy Farm Median Land Prices for quarter ending August 2019 over quarter ending August 2017. Dairy farm prices referred to in the chart are median land prices which is the midway point of sale price in a 3-month period. Median is a better indicator for market trend for land prices. Outliers and skew have a lesser impact on median when compared to simple averages; The dataset is smaller - Sale volume data 13 farms have been sold in August 2019 vs 20 farms in August 2017; **NZRLC indicative price levels is based on median all farm data; average production levels and does not factor in regional and site-specific differences; *** This is an annual forecast capital gain in the range of +3.00% and +4.50% per annum over the ensuing ten year period. This is composed of underlying asset growth estimated at +1.26% to +2.03% per annum over 2019 levels which is premised from market growth rates from 2007-2019 and 2009-2019 (refer pages 23 & 26) + NZRLC’s forecast annual accretion of between +1.74%-+2.47% per annum which is based on an acquisition discount between -26% to -38% to 2017 price levels and a subsequent return to market prices over the ten year period [2019-2029].

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Dairy Farm Prices over the Next Decade Analysis of Historical Growth Rates for Dairy Farm Prices over Distinct Periods. Median Dairy Farm Prices Per Hectare Current price levels for dairy farms*

Median NZ$ per hectare of dairy farm land

$50,000

$30,000

$20,000

NZRLC indicative purchase price levels for comparable farms**

$10,000

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

PERIOD PERIOD DESCRIPTION ANNUAL GROWTH RATE

KEY FACTORS

19962019

20072017

20072019

20092019

20192029

Since Farms Sales Data was Collected by REINZ

Pre GFC (including GFC) to Pre Foreign Buyer Ban and Credit Reduction

Pre GFC (including GFC) to Today (including Foreign Buyer Ban and Credit Reduction)

Last Decade (Excluding GFC) and (including Foreign Buyer Ban and Credit Reduction)

Next Decade

+4.58% The last 23 years witnessed: •Strong global demand, •Over a decade of high intensification (+16.12%), •A decade of low intensification, (+1.07%), •GFC and recent domestic policy changes (OIO, RBNZ).

+4.21% The decade before 2017 witnessed: • Strong global demand, • Increasing efficiency, • “Low-to-None” intensification (+0.72%), • GFC.

*Asset acquisition at a further discount to 2019 market levels will increase the NTA growth rate for NZRLC.

+1.26% The last 12 years witnessed: • Strong global demand, • Increasing efficiency, • Low intensification (+1.79%), • GFC and recent domestic policy changes (OIO, RBNZ).

+2.03% The last decade witnessed: • Strong global demand, • Increasing efficiency, • “Low-to-None” intensification (+1.07%), • Recent domestic policy changes (OIO, RBNZ).

Estimated range for potential capital appreciation

$40,000

2029

+1.26% - +2.03% (p.a)

NZRLC GROWTH ESTIMATE* from 2019 market levels to 2029 market levels

The next decade is expected to witness: • Strong global demand, • Favourable consumer preference shift towards sustainable dairy, • Increasing commodity prices, • No further intensification and shrinking dairy footprints, • Increasing efficiency and further innovation, • Improved animal genetics, • Increased credit and investment flow, • Restored positive sentiment as new investments take hold.

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

NZRLC will aim to acquire high quality assets in prominent dairy regions • Optimal natural conditions; • Larger farm sizes and herd sizes; • Efficient production levels (per cow and per hectare); • Availability of skilled labour; • Good quality infrastructure; • Sustainability + Environmental focus.

NZRLC will aim to acquire fundamentally attractive assets currently available at a discount. That is not the same as acquiring the cheapest available asset.

WAIKATO % of NZ milk solids produced: 22% Average kgMS per h.a.: 1067

OTAGO CANTERBURY

% of NZ milk solids produced: 15.5% Average kgMS per h.a.: 1140

% of NZ milk solids produced: 16% Average kgMS per h.a.: 1469

SOUTHLAND of NZ milk solids produced: 13% Average kgMS per h.a.: 1121

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Analysis of New Zealand Dairy Land Prices - Canterbury • With an indicative purchase price of NZ$35,256 per h.a., NZRLC land price forecasts for 2029 provides a potential upside range of +38% to +49%; • This is an annual capital gain in the range of +3.27% and +4.05% per annum. (This is comprised of underlying asset growth estimated at +1.26% to +2.03% per annum over 2019 levels + NZRLC’s forecast annual accretion based on acquisition discount to 2019 price levels.)

IMPORTANTLY NZRLC’S 2029 LAND PRICE FORECAST FOR THE CANTERBURY REGION IS STILL BELOW 2017 LEVELS.

2029 Forecast Land Price (NZ$ per h.a.) and Expected Returns for Canterbury Dairy Farms +49%

+38%

$ 60,000

+3.27% p.a.

+4.05% p.a.

NZ$ per hectare

$ 50,000

+3.27% p.a. $ 40,000

-33% $ 30,000

-18% $ 20,000 $ 10,000 0

$52,704 2017 Median Price Levels*

$42,905 2019 Median Price Levels*

$35,256 Indicative Purchase Price**

$48,628

$52,455

2029 Projected Value (Low End)*** 2029 Projected Value (High End)***

*REINZ data; ‘Median Price Level’ is the midway point of sale prices in a 3-month period. Median is a better indicator of market trend for land prices. Outliers and skew have a lesser impact on median when compared to simple averages; **Indicative Purchase Price is based on expected lease rates, average production levels in the region and does not account for site-specific differences; ***Projections for 2029 assume capital appreciation of dairy farms for the period 2019 - 2029 to range between 1.26% and 2.03% over Median Price Level. At a discounted purchase price, NZRLC assets are projected to have a higher capital appreciation rate.

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Analysis of New Zealand Dairy Land Prices - Waikato • With an indicative purchase price of NZ$25,608 per h.a., NZRLC land price forecasts for 2029 provides a potential upside range of +55% to +67%; • This is an annual capital gain in the range of +4.45% and +5.24% per annum. (This is comprised of underlying asset growth estimated at +1.26% to +2.03% per annum over 2019 levels + NZRLC’s forecast annual accretion based on acquisition discount to 2019 price levels.)

IMPORTANTLY NZRLC’S 2029 LAND PRICE FORECAST FOR THE WAIKATO REGION IS STILL BELOW 2017 LEVELS.

2029 Forecast Land Price (NZ$ per h.a.) and Expected Returns for Waikato Dairy Farms +67%

+55%

$ 50,000 $ 45,000

+5.24% p.a.

NZ$ per hectare

$ 40,000

+4.45% p.a.

$ 35,000 $ 30,000

-49%

$ 25,000

-27%

$ 20,000 $ 15,000 $ 10,000 $ 5,000 0

$50,503

$34,923

2017 Median Price Levels*

2019 Median Price Levels*

$25,608 Indicative Purchase Price**

$39,581

$42,696

2029 Projected Value (Low End)*** 2029 Projected Value (High End)***

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Analysis of New Zealand Dairy Land Prices - Otago & Southland • With an indicative purchase price of NZ$27,132 per h.a., NZRLC land price forecasts for 2029 provides a potential upside range of +45% to +56%; • This is an annual capital gain in the range of +3.76% and +4.55% per annum. (This is comprised of underlying asset growth estimated at +1.26% to +2.03% per annum over 2019 levels + NZRLC’s forecast annual accretion based on acquisition discount to 2019 price levels.)

2029 Forecast Land Price (NZ$ per h.a.) and Expected Returns for Otago & Southland Dairy Farms +56%

+4.05% p.a.

+45% $ 45,000

+3.27% p.a.

NZ$ per hectare

$ 40,000

+3.76% p.a.

$ 35,000

+4.55% p.a.

$ 30,000 $ 25,000 $ 20,000 $ 15,000

-23%

-22%

$ 10,000 $ 5,T000 0

$35,245

$34,621

$27,132

2017 Median Price Levels*

2019 Median Price Levels*

Indicative Purchase Price**

$39,239

$42,327

2029 Projected Value (Low End)*** 2029 Projected Value (High End)***

Overseas Investors Blocked “Foreign Buyer Ban”

Case Study : Farm DFA32 - Available at a Discount Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

This example counterparty bidding on “Farm DFA32” shows our analysis/thesis act Case Study : Farmof our DFA32

SOUTHLAND

millions

Farm: DFA32

$60

This is an example of a farm we conducted “initial” due diligence on: farm size: 846 hectares total annual milk solids (average efficient): 970,000 kgms soil type: silt loams contour: flat to rolling

NZRLC

$50

$40

$30

-34% $20

$10

$33 Valuation 1

Source: Company Information

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Case Study: Farm DFA32 - Opportunity to Purchase at a Discount and Forecast Returns to 2029 • With an indicative purchase price of NZ$24 Million, purchasing DFA32 was expected to provide a potential upside range of +41% to +52% using our land price forecasts for 2029. • This is an estimated annual capital gain between +3.52% and +4.31% per annum. (This is comprised of underlying asset growth estimated at +1.26% to +2.03% per annum over 2019 levels + NZRLC’s forecast annual accretion based on acquisition discount to 2019 price levels.)

IMPORTANTLY NZRLC’S 2029 LAND PRICE FORECAST FOR DFA32 WAS ONLY A REVERSION TO 2017 PRICE LEVELS 2029 Forecast Land Price (NZ$ Million) and Expected Returns for Farm DFA32 +52%

+41% $40 $35

NZ$ Million

$30 $25

+4.31% p.a.

+3.52% p.a. -32%

$20

-17%

$15 $10 $5 0

$35 M

$41,899 Per Ha.

2017 Median Price Levels For Comparable Farms*

$29 M

$34,656 Per Ha.

2019 Median Price Levels For Comparable Farms**

$24 M

$28,664 Per Ha.

Indicative Purchase Price for DFA32 in 2019***

$34 M

$40,508 Per Ha.

$37 M

$43,696 Per Ha.

2029 Projected Value (Low End)**** 2029 Projected Value (High End)****

*Average of Valuation Methodology 1.1 and Valuation Methodology 2.1; REINZ data; ‘Median Price Level’ is the midway point of sale prices in a 3-month period. Outliers and skew have a lesser impact on median when compared to simple averages; **Average of Valuation Methodology 1.2 and Valuation Methodology 2.2; REINZ data; ‘Median Price Level’ is the midway point of sale prices in a 3-month period. Outliers and skew have a lesser impact on median when compared to simple averages; ***Indicative Purchase Price is based on expected lease rates and average efficient production levels of Farm DFA32; ****Projections for 2029 assume capital appreciation of dairy farms for the period 2019 - 2029 to range between 1.26% and 2.03% over Median Price Level. At a discounted purchase price, NZRLC assets are projected to have a higher capital appreciation rate.

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Case Study : Farm DFA32 - Opportunity to Purchase at a Discount to earnings based valuation • Dairy farms – like other assets trade on a multiple of earnings capability;

Years

Historic Operating Return on Dairy Assets

• In the past, Dairy farms have generated RoA in a range of +2.9% to +8.8%; the 10 Year Average is +5.2%; (This is for all farms-not just farms sold);

FY2018 FY2017

4.70%

• Using estimated current earnings capability for Farm DFA32 and historical RoA, we estimate land value;

FY2016

-0.70%

• NZRLC’s proposed purchase price was at a significant discount to earnings-based valuation** estimates of DFA32 due to increasing short-term earnings capability and declining land prices. Indicative Purchase Price Discount to Earnings Based Valuation (Methodology 3, refer to page 95)

FY2015

2.90%

FY2014

8.80%

FY2013

5.10%

FY2012

6.10%

FY2011

7.60%

FY2010

6.00%

Average

$120

6.30%

Range

5.20% -0.70% to 8.80%

$100

NZ$ Million

$80

$60

$40

-78%

-57%

-17%

$109 M

$56 M

$29 M

$24 M

Earnings Based Valuation @ RoA of 8.8%

Indicative Purchase Price for DFA32 in 2019

$20

Earnings Based Valuation @ RoA of 2.9%

Earnings Based Valuation @ RoA of 5.2%

*Estimated Average Economic Farm Surplus adjusted for Support Block for DFA32 = NZ$4,072 per hectare which is the gross operating profit on assets (FY2020 Milk Price of $7.20); **Earnings Based Valuation is adjusted for value of Fonterra Shares, (Market Price on 12/12/2019), Livestock, Plant & Equipment

Case Study : Farm DFA32 - Valuation Methodology

BASIS

FORMULA

DATA / ASSUMPTIONS

SOURCES OF INFORMATION

Methodology 1

Methodology 2

Methodology 3

PRICE PER HECTARE OF COMPARABLE SALES

PRICE PER KGMS OF COMPARABLE SALES

OWNER OPERATOR YIELD

Market for dairy land is efficient and value of land is based on arms length transactions between buyers and sellers in the region.

Dairy land is like a factory and its value is determined by the volume of milk production.

Farms over the long run will trade at a certain cap rate/range (like a commercial property or other asset class) based on a reasonable expectation of earning for an owner-operator.

Median sale price per hectare for farms sold in the region multiplied by Farm Size.

Median sale price per kgMS production for farms sold in the region multiplied by average efficient kgMS production of the farm per h.a. multiplied by Farm Size.

{Economic Farm Surplus (EFS) divided by Return on Assets (RoA) } Less {Adjustments for Value of Cows, Fonterra Shares, Plant & Equipment}.

Methodology 1.1: Comparable farm sale prices data per h.a. 2019 Â Price per h.a. in 2017: NZ$35,741 Farm Size: 846 h.a.

Methodology 1.2: Comparable farm sale prices data per h. a. 2017 (Pre-OIO & RBNZ policy changes)

Methodology 2.1: Farm sale prices data per milk solids produced for comparable large farms 2019

Asset value is related to its earnings power

Price per h.a. in 2017: NZ$38,526 Farm Size: 846 h.a.

Price per kgMS in 2017: NZ$29.19 Average kgMS per h.a: 1,147 Farm Size: 846 h.a.

REINZ

Methodology 2.2: Farm sale prices data per milk solids produced for comparable large farms 2017 (Pre-OIO & RBNZ policy changes)

EFS per h.a. : NZ$ 4,072 Farm Size: 846 h.a. RoA: 2.9%, 5.2%, % 8.8%

Price per kgMS in 2017: NZ$39.49 Average kgMS per h.a: 1,147 Farm Size: 846 h.a. DAIRY BASE, DAIRY NZ, FARM CONSULTANTS

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

Compelling Opportunities Exist Hence the formation of NZRLC

NEW ZEALAND Rural Land Co SUS TAIN ABLE AOTEAROA

100

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices & Presenting an Opportunity

Banks Reducing Credit to the Sector

How long will the current investment opportunity last? The current environment may not last indefinitely, changes in any one or a combination of these conditions can affect the current investment opportunity. Demand for dairy land can change via: Ê Change in government / policy around foreign investors; Ê Change in public sentiment about dairy from industry initiatives on mitigating risks;

Overseas Investors Blocked “Foreign Buyer Ban”

Impacting Land Prices

Ê Continued increase in earnings due to price increases relieving pressure of high debt service costs; Ê Fresh equity / debt capital injection in the sector from third party investors; Ê Banks resume providing credit to farmers / provide refinancing options.

Widespread Negative Sentiment on the Sector

Banks Reducing Credit To The Sector

101

When Factors Change Prices Adjust Dramatically and Quickly... • Exempt from foreign buyer ban, Forestry land prices have increased by +102% (CAGR +42%) since Oct 2017. (OIO Policy Change); • Horticulture land prices have increased +40% (CAGR +7%) since Oct 2014 driven by positive sentiment/earnings and strong credit growth. Credit for horticulture in the same period grew by +62% (CAGR +10%).

Foreign Investment Drives Forestry Land Prices

GROWTH

MEDIAN NZ$ PER HECTARE $ 12,000

+102%

$11,000

Positive Sentiment/Earnings and Credit Drives Horticulture Land Prices

MEDIAN NZ$ PER HECTARE

GROWTH

$ 300,000 $240,000

$ 250,000

$ 10,000

$201,000

$205,000

OCT 2015

OCT 2016

$215,000

$214,000

$ 200,000

$7,390

$ 8,000

+40%

$153,000 $ 6,000

$5,450

$ 150,000

$ 4,000

$ 100,000

$ 2,000

$ 50,000

0 OCT 2017

OCT 2018

OCT 2019

OCT 2014

OCT 2017

OCT 2018

OCT 2019

Source: REINZ; RBNZ

102

NEW ZEALAND RURAL LAND COMPANY LIMITED Our Objectives: Purchase high quality rural land at a discount

Lease the land to financially and operationally strong counterparties

Allow investors to capture the potential long-term growth in asset value and consistent cash flows via lease payments from high quality / well financed operators

103

NZRLC plans to offer investors exposure to high quality rural land at a discount • As the world’s population grows, productive agricultural land becomes increasingly important; • New Zealand has a competitive advantage in agriculture and NZRLC seeks to invest in rural land assets when opportunities are present; • Currently, there exists an opportunity to acquire the world’s most sustainable dairy farms at a discount and NZRLC has a unique solution to capitalise on this.

NEW ZEALAND Rural Land Co SUS TAIN ABLE AOTEAROA

DAIRY Current Opportunity

SHEEP & BEEF

HORTICULTURE & VITICULTURE

FORESTRY & OTHER

104

NZRLC offers a unique solution that is beneficial for all stakeholders Investors are seeking: • Lower cost and transparent access to rural assets; • High quality assets in the portfolio;

Investors

• Credible and reliable counterparties for regular dividend flows; • Liquidity.

NEW ZEAL AND Rural L and Co SUS TAIN ABLE AOTEAROA

Banks / Highly Indebted Farms need:

Counterparties/Operators benefit from:

• Credible New Zealand-based investors;

• Long-term landowner / capital provider;

Banks

• Fresh equity into the sector; • Politically palatable solution to rural debt challenges.

Operators

• High quality agricultural assets via lease which improves their capital efficiency; • Access Large scale operations.

NZRLC is an attractive solution as it is a New Zealand solution to the stresses that currently exist within the rural sector. 105

NZRLCâ&#x20AC;&#x2122;s unique solution involves separation of the asset from the underlying operations NZRLC will acquire high-quality rural land assets as a PropCo and will partner with quality OpCoâ&#x20AC;&#x2122;s for on-farm operations.

NEW ZEAL AND Rural L and Co EQUITY CAPITAL

SUS TAIN ABLE AOTEAROA

LEASE AGREEMENT

INVESTORS IN RURAL LAND

LAND OWNER

Rural land continues to remain an attractive asset class for diversified portfolios.*

NZ Rural Land Company will acquire high quality assets at a discount and lease the underlying land to strong counterparties / operators.

Investors benefit from consistent dividends via lease payments and longterm capital appreciation while mitigating traditional risks from operational assets and commodity price volatility.

CAPITAL GAIN + REGULAR DIVIDENDS

As a landowner NZRLC is not directly exposed to traditional risks in agricultural operations.

TENANT /OPERATOR

CONSISTENT LEASE PAYMENTS

Experienced, well financed, sustainability focused operators are best positioned to manage on-farm and other business risks. Our quality counterparties benefit from long-term lease of the land and pay consistent lease payments during the term period (10-15 years).

* Refer page 147 in Appendices

106

NZRLCâ&#x20AC;&#x2122;s structure mitigates the traditional risks in agriculture for investors LEASE AGREEMENT*

NEW ZEALAND Rural Land Co SUS TAIN ABLE AOTEAROA

CONSISTENT LEASE PAYMENTS

LAND OWNER As a land owner, there are certain risks and NZRLC has gone a long way towards to mitigating these Counterparty risks mitigated by partnering with high quality operators; Leverage risks mitigated by maintaining stable level of debt (Max: 30%);

TENANT /OPERATOR Experienced, well financed, sustainability focused operators are best positioned to manage the traditional risks of agriculture On-farm risks;

Volatile commodity prices;

Animal health risks; Single industry risk is mitigated by alternative land use.

* Refer page 110-113

Environmental risks;

Performance of farmer co-ops. 107

NZRLC’s Criteria for Selecting Tenants/Operators NZRLC selects high quality tenants/operators based on the following criteria:

OPERATING PERFORMANCE / EXPERIENCE • Proven ability to operate through commodity cycles; • Proven ability to operate elite EFS farms; • Attract and retain quality management.

STRONG BALANCE SHEETS

ROBUST GOVERNANCE

SUSTAINABILITY FOCUS

• Sufficient assets / Equity to meet the vagaries of climate and commodity price volatility while still meeting financial obligations.

• Independent and experienced governance;

• Reputation for efficient and sustainable farming practices;

• Able to operate professional management and investment structure.

• Long-term stable operational performance, through various cycles.

• NZRLC requires counterparties to have at least 6x annual lease obligations worth of equity.

108

NZRLC has MoUs in place with three counterparties* We have signed MoUs with three high quality operators based on their:

OPERATING PERFORMANCE / EXPERIENCE

STRONG BALANCE SHEETS

ROBUST GOVERNANCE

COUNTERPARTY SUMMARY* Net Assets

Implied Maximum Lease Implied farm size @ 6 x Rent Cover @ 5% Lease

Total Assets**

Total Debt**

150M

82M

68M

11.3M

226M

Counterparty 2*** 59M

25M

34M

5.7M

113M

Counterparty 3

72M

56M

9.3M

187M

Counterparty 1

129M

Current total 338M 179M 158M 26.3M 526M with existing counter parties

SUSTAINABILITY FOCUS

Counterparty Locations: Waikato / King Country

Canterbury Southland

Please Note: We have other quality counter-parties that we are in discussions with without signed MOUâ&#x20AC;&#x2122;s for an instance of additional land capacity.

* As at 14 November 2019 **Excludes Related Party Non-Interest-Bearing Loans *** Richard Milsom a director and shareholder of NZRLM and currently contracts services to this counterparty. A family trust, of which Richard Milsom is a beneficiary, has a financial interest in this particular counterparty.

109

NZRLC - Key Lease Terms

Topic

Clause reference(s)

Comments

Change in Ownership

1.1

Any change in the legal or beneficial ownership of more than 24.9% of the Lesseeâ&#x20AC;&#x2122;s shares or a change in the effective management or control in the Lessee company shall be an assignment to which the Lessorâ&#x20AC;&#x2122;s consent is required. (Cannot be unreasonably withheld).

Term

2.1

The period of the initial term is 10 years.

Right of renewal

3.1

The lessee has one right of renewal of five years. The lessee must exercise its right of renewal at least six months prior to the renewal date.

Permitted use

4.1

The lessee must only use the property for the permitted use, specifically being the grazing of stock (including dry dairy cows, heifers and service bulls) as required for dairy farming and mating operations, milking cows and any ancillary uses.

Market rent review

7.1

The market rent review will occur on the renewal date. Either party may give notice at least three months prior to the renewal date to the other party specifying the amount proposed to be the market rent payable from the renewal date and otherwise triggering the market rent review process.

CPI rent reviews

7.2

The rent will be adjusted in accordance with any increase in the CPI on the third, sixth and ninth anniversaries of the commencement date, and if the right of renewal is exercised, the thirteenth anniversary of the commencement date.

110

NZRLC - Key Lease Terms 7

Outgoings

The lessee will pay outgoings to the lessor on demand, or if required by the lessor, by monthly installments on the 20th day of each month during the term of a reasonable amount as the lessor determines calculated on an annual basis. Outgoings include 100% of the following charges: - Local authority (including council and regional council) rates and levies; - Water rates; - Insurance premiums and excesses for the lessorâ&#x20AC;&#x2122;s insurance; - Insurance valuation fees; - Electricity charges; - Maintenance and repair charges for the services to the property (including electricity and water).

Lesseeâ&#x20AC;&#x2122;s maintenance obligations

10 and 12

The lessee is required, amongst other things, to: - keep the property and the lessorâ&#x20AC;&#x2122;s improvements on the property in the same condition that they were in as at the commencement date (to be evidenced by a property condition report to be attached to the lease including photographic evidence and written descriptions of the property); - repair any damage caused by the lessee including any damage caused by careless usage or stock movements; - use conventional farm management practices to eradicate noxious plants and common pasture weeds; - comply with the Biosecurity Act 1993, national pest management strategies, legislation relating to the operation and management of farm properties carrying stock, animal welfare requirements and policies, the Health and Safety at Work Act 2015, resource consents for the taking of water, standards in relation to healthy waters and effluent rules; and - commission a soil and herbage report within two months of the commencement date and two months prior to each anniversary of the commencement date and the expiry date, and topdress the property with fertiliser and / or lime in accordance with the recommendations of the report by each anniversary of the commencement date and the expiry date.

111

NZRLC - Key Lease Terms 9

Annual meeting

A representative from each party with authority to bind that party will meet annually to ensure that the lessee has complied, and is complying, with its ongoing maintenance obligations. Minutes will be prepared and circulated by the lessee following the meeting and the lessee will comply with the agreements reached during the meeting and the reasonable directions of the lessor made following the meeting (that will be included in the minutes) within the agreed or given (respectively) time frames.

Lessor’s maintenance obligations

11.1

The lessor will: - at the lessee’s cost via the outgoings mechanism, keep and maintain all services to the property (including water and electricity) in good order, repair and condition; and - at the lessor’s cost, replace the lessor’s improvements and services as necessary to ensure that they are, at all times, operating effectively and are fit for purpose.

Lessee’s reinstatement obligations at the end of the term

10.4

By the end of the term, the lessee is required, amongst other things, to: - remove its stock, fixtures, fittings, chattels, alterations and additions from the property, and make good any damage caused to the property in doing so; - leave bale equivalents (amount to be decided) of silage or hay at the property; - as noted above, topdress the property in accordance with the recommendations of the soil and herbage report; and - ensure that the farm pasture is replenished (amount of kilograms of dry matter per hectare to be decided).

Lessee’s insurance

10.5

The lessee must maintain public liability insurance. The amount is to be decided/negotiated.

Guarantee Hedging & Bond

The tenant will guarantee leases (jointly and severally if applicable). The tenant may be required to hedge milk exposure (balance sheet and lease size dependent). The tenant will be required to pay a bond relative to the size of the lease.

112

NZRLC - Key Lease Terms 14

Lessor’s insurance

11.2

At the lessee’s cost via the outgoings mechanism, the lessor will keep and maintain cover for the following risks: - the lessor’s improvements against damage and destruction by fire, flood, explosion, lightning, storm, earthquake and volcanic activity on a full replacement and reinstatement basis; - 12 months’ indemnity in respect of consequential loss of rent and outgoings; - loss, damage or destruction of the lessor’s improvements; and - public liability.

Farm specific clauses

This clause has been inserted as a placeholder to ensure that any terms that are unique to the property are included.

Lessee’s Environmental Obligations

10 and 12

Standards in relation to healthy waters and effluent rules. • All resource consent conditions; • National & Local Water Standards & Legislation; • National & Local Effluent Standards & Legislation; • Other Environmental National & Local Legislation & Standards.

Lessee’s Animal Welfare Obligations

10 and 12

The tenant will be responsible for Animal Welfare issues and bound to the Animal Welfare Act 1999 and the related codes below: • Code of Welfare for dairy cattle; • Code of Welfare for painful husbandry procedures; • Code of Welfare for transport of animals in New Zealand.

113

NZRLC Capital Expenditure and Repairs & Maintenance of Assets Owned NZRLC’s ability to maximise value is contingent on its ability to purchase quality, well-located, well-priced, assets with alternative uses in addition to an asset maintenance and capital expenditure program to enhance and protect asset values. A key difference between Agricultural Assets - specifically Dairy Farms - and other assets such as commercial property is the ratio of depreciating assets (improvements) to land with farms the improvements are traditionally <20% of total value. As NZRLC (the Landlord) is the party responsible for the Capital Expenditure and NZRLC’s policies, structure and processes, as per below, are set out to further enhance and protect assets for the long term.

Listed below are risks associated with property asset ownership and the mitigants in the case of NZRLC: 1. UN-BUDGETED CAPITAL EXPENDITURE THAT REDUCES THE EXPECTED CASH RETURN As primarily a land / property owner a substantial expenditure item for NZRLC will be Capital Expenditure - both asset replacement and asset improvement. A risk is that an asset has CAPEX above and beyond what is BUDGETED. Mitigating Factors: 1. Comprehensive Due Diligence during the purchase period will cover any improvements needing to be replaced or that have been under-invested in or under-maintained - this will be built into the purchase price (this includes effluent systems, dairy shed, races, bridges, other compliance related Capital Expenditure, and soil nutrients / fertiliser). The type of improvements on Dairy Farms mean that surprises are unlikely and if there are improvements that need replacing then they will be undertaken pre-lease commencement. Other business as usual CAPEX has been allowed for in the NZRLC budget (See pages 123-125). See Property Due Diligence for further detail on the Due Diligence conducted at the time of purchase. 2. NZRLC will have a budget for each property that includes a CAPEX allowance (see pages 123-125 for an illustrative example). This will ensure that an appropriate CAPEX allowance is made for each property depending on the ratio of land to improvements and type of improvements - this will be factored into the purchase price and lease expectation. 3. NZRLC will have insurance (either covered by the lease payments or expensed to tenants via OPEX) that provides cover for fire, flood and earthquake alongside other accidents and public liability to protect against loss. 4. Value accretive CAPEX such as further land clearing, land development or other that increases the value of the property will be dealt with on a case-by-case basis - if it is purely a benefit to the landlord, NZRLC would incur the cost provided the project passes a cost vs benefit test. If the benefit was to be shared then the CAPEX would be split (on a case-by-case basis) or the lease rate would be adjusted to account for the increased benefit to the tenant.

2. SURPLUS CAPITAL EXPENDITURE DUE TO REPAIRS & MAINTENANCE (R&M) NOT BEING UNDERTAKEN There is a certain amount of capital expenditure required to replace items at the end of their useful life. The length of somethings ‘useful life’ can be shortened by Repairs & Maintenance not being undertaken proactively and comprehensively. Mitigating Factors: This is mitigated via comprehensive and exhaustive contractual lease clauses, regularity, skill and proactiveness of the property management and quality of operators with regard to their stewardship of the asset. For further information on Property Management and Lease Clauses - see pages 110113

3. ENVIRONMENTAL FACTORS BEING IGNORED OR MISSED IMPAIRING THE ASSET VALUE

Compliance with regional water plans, environmental plans and environmental laws are conditions of the lease and compliance will be audited by NZRLC property management or qualified agent to provide certainty. 114

NZRLC Default Risk Mitigants / Management 1. Counter-parties have been selected based on a demonstrated history of farming proficiency and a robust balance sheet Governance, Management and Financial Health have been evaluated for strength on a case-by-case basis during Due Diligence by NZRLC to mitigate risk/s. 2. Counterparties will be matched to property size based on their individual financial strength NZRLC’s covenant requires a counter-party to have at least 6X the annual lease worth of equity**. We believe this is conservative based on the counterparties estimated break even milk price (~NZ$5.50 /kgMS***). 3. Counter-parties have been selected based on geographical expertise, experience and resilience in a particular region and will be matched with farms in those areas

4. Multiple Counter-parties Having 3+ counterparty groups diminishes the binary risk of one operator/counterparty. There exists scope to further expand counterparties as NZRLC grows. 5. Break-even milk price required for operators is low based on 10 year average and forecast milk price. Break even milk price for a tenant is estimated at ~NZ$5.50 /kgMS***. Milk prices are expected to continue rising over the long-term based on the increased global milk deficit caused by growing populations and rising incomes placing upward pressure on global prices.

6. Leasing Farms allows operators to expand in an asset light manner (especially with limited access to capital for the sector at present), making replacement tenants easier to procure NZRLC will maintain relationships with other counter-parties that would be in a position to takeover a lease or to lease further properties if current counter-parties are at capacity. 7. Low Maximum Gearing for NZRLC Maximum leverage for NZRLC will be 30%. So in the unlikely event of one counterparty defaulting, it will not jeopardise NZRLC. 8. Not a custom asset for a specific tenant Farms are an asset able to be used not only across a large number of operators (8,380 NZ dairy farm operators*****) but also across agriculture sectors. Additionally, farms have alternative use in the event of ‘black swan’ dairy event.

*Excludes Related Party Non-Interest-Bearing Loans and Goodwill **Some tenants may also be required to hedge their milk income (tenant/property dependent) ***Based on NZ$1.10 / kgMS Lease, NZ$4.20 FWE**** /kgMS and NZ$0.20 /kgMS of other - the average milk price for the last 10 years was $6.39 / kgMS, projected milk price for this year is NZ$7.10 - NZ$7.90: see page 72. ****FWE varies operator to operator, region to region and season to season, the lease will likely vary between NZ$1.05-NZ$1.35 / kgMS depending on the individual property and profile, we use NZ$1.20 / kgMS as a midpoint *****DairyNZ

115

NZRLC is forecast to offer attractive returns (over 10 years) with lower risk than traditional/historical offers in the rural sector

Forecast dividend yield of*

+3.50% p.a. (Net of Fees and Costs)

Forecast asset value growth between**

Forecast total returns between

+3.00% and +4.50% p.a.

+6.50% to +8.00% p.a.

(Net of Fees and Costs)

* Based on a minimum lease rate of 4.5% and total costs of up to 1.00% per annum - including management fee of 0.50% per annum. ** This is an annual forecast capital gain in the range of +3.00% and +4.50% per annum over the ensuing ten year period. This is composed of underlying asset growth estimated at +1.26% to +2.03% per annum over 2019 levels which is premised from market growth rates from 2007-2019 and 2009-2019 (refer pages 23 & 26) + NZRLCâ&#x20AC;&#x2122;s forecast annual accretion of between +1.74%-+2.47% per annum which is based on an acquisition discount between -26% to -38% to 2017 price levels and a subsequent return to market prices over the ten year period [2019-2029].

116

NZRLC has a robust & transparent investment structure A majority New Zealand owned, operated and domiciled company**

Accountant

NEW ZEALAND Rural Land Co

Auditor

SUS TAIN ABLE AOTEAROA

Registry

Listed PIE*

NEW ZEAL AND Rural L and Management Management Fee: 0.50% per annum of Net Asset Value Transaction Fee: 1.25% of acquisition/divestment values Performance Fee: 10% of net asset realisations (over cost) - paid in shares

ROB CAMPBELL

SARAH KENNEDY

CHRISTOPHER SWASBROOK

Independent Chair***

Independent Director***

Management Company Director

*NZRLC will be a Portfolio Investment Entity (PIE) for tax purposes at the time of listing on the NZX, meaning that tax is paid on the investors behalf at a rate approximating the investors marginal tax rate but capped at 28%. PIEâ&#x20AC;&#x2122;s offer significant advantages from an administrative perspective. For tax purposes, if you are a New Zealand resident and have supplied the correct PIR, tax is usually paid on your behalf at a rate approximating your marginal tax rate and there is no further tax to pay. PIE tax is capped at 28%, which can be a benefit to 33% tax rate investors. Find out more about PIE at https://www.ird.govt.nz/roles/ **International Investment in NZRLC will not exceed 24.90% as permitted under OIO rules; *** Independent Directors will be remunerated at NZ$50,000 and NZ$30,000 per annum from 1 April 2020 until listing on NZX when fees will be reviewed

117

NZRLC – Key People NEW ZEALAND Rural Land Co

NEW ZEALAND Rural Land Management

SUS TAIN ABLE AOTEAROA

ROB CAMPBELL Independent Chair

Chair – SKYCITY Entertainment Group Chair – WEL Group Limited Chair - Tourism Holdings Chair - Summerset Group Director - Precinct Properties Previously Director - T&G Global

SARAH KENNEDY

Independent Director

Director - Comvita NZ CEO - Lifestream International (NZ) Limited and Calocurb Previously CEO - Designer Textiles International Previously Vice President International Farming - Fontera Previously CEO / Member of the Board of Directors - Vitaco Health Limited Previously CEO - Healtheries of New Zealand Ltd

CHRISTOPHER SWASBROOK

Director - Management Company Representative Managing Director – Elevation Capital Management Limited Board Member – Financial Markets Authority Director – Bethunes Investment Limited, New Zealand Rural Land Management Limited and Swimtastic Limited Previously a Partner of Goldman Sachs JBWere Pty Limited & Co-Head of Institutional Equities at Goldman Sachs JBWere (NZ) Limited

SHELLEY RUHA

RURAL VALUER

Independent Chair

Independent Consultant

Director - Heartland Bank Director - Icehouse Director - 9 Spokes Previously - Senior Management Team and leader of BNZ Partners - BNZ

CHRISTOPHER SWASBROOK

Director

FARM CONSULTANT

Managing Director – Elevation Capital Management Limited Board Member – Financial Markets Authority (FMA) Director – Bethunes Investment Limited, New Zealand Rural Land Company Limited and Swimtastic Limited Previously a Partner of Goldman Sachs JBWere Pty Limited & Co-Head of Institutional Equities at Goldman Sachs JBWere (NZ) Limited

Independent Consultant

RICHARD MILSOM

AGRICULTURAL ENVIRONMENTAL SPECIALIST

Director Consultant - Elevation Capital Management Limited CEO – Bellevue Enterprises Limited – Bovine & Porcine Genetic Improvement & Sustainable Pork Production Company INFINZ Board Member INFINZ Emerging Leader 2017

HAYDEN DILLON

Director

Independent Consultant

RURAL PROPERTY MANAGER

Rural Property Manager

Managing Partner Findex (Waikato) & Head of Agribusiness New Zealand for Findex. Independent Director - Williams Holdings Limited Independent Director - Aquila Sustainable Farms Limited and associated Limited Partner Farms. Independent Director Rowing New Zealand. Trustee - South Waikato Investment Fund Chairman - Bioceta Limited Previously - Senior Partner Bank Of New Zealand – Waikato Previously - Corporate Relationship Manager Food Fibre & Beverage National Australia Bank - Melbourne Fellow FINSIA

118

NZRLC - Board Bios

Rob Campbell Independent Chair

Sarah Kennedy Independent Director

Chris Swasbrook Director & Management Company Representative

Independent Chair appointed in April 2020. Rob has over 30 years experience in investment management and corporate governance. Rob is the Chairman of SkyCity Entertainment Group Limited, Summerset Group Holdings Limited (NZ), Tourism Holdings Limited and WEL Networks, and a director of Precinct Properties. Rob trained as an economist and has worked in a variety of capital market advisory and governance roles over a long period.

Independent Director appointed in April 2020. Sarah is also currently an independent director of NZX listed Comvita Limited. Sarah was formerly the CEO of Lifestream International, a 100% New Zealand owned company specialising in bioavailable, ethical, plant-based health foods; CEO of Designer Textiles International; from 2011 to 2014, Sarah held a number of senior roles with Fonterra - Vice President of International Farming based in China, Managing Director of Dairy Nutrition and Managing Director of RD1 - Fonterra’s chain of rural retail stores. Prior to that, Sarah had 10 years as Managing Director of Healtheries/Vitaco NZ Limited. Sarah is originally a veterinarian by training and has held a number of other senior executive positions in agribusiness and food industries.

Christopher Swasbrook is one of the founders and directors of New Zealand Rural Land Management Limited. He is also the Founder and Managing Director of Elevation Capital Management Limited. He was previously a Partner of Goldman Sachs JBWere Pty Limited, Co-Head of Institutional Equities at Goldman Sachs JBWere (NZ) Limited and a Foundation Broker of the New Zealand Exchange Limited (“NZX”) and prior to that an Individual Full Member of the NZ Stock Exchange (“NZSE”). He is currently a Board Member of the Financial Markets Authority (“FMA” since 2019) in New Zealand, the NZX Listing Sub-Committee (since 2008) and a member of the NZ Markets Disciplinary Tribunal (since 2013). He is also a Director of Bethunes Investments Limited and Swimtastic Limited. Mr. Swasbrook graduated from The University of Auckland with a BCom (Economics) in 1996, and has undertaken Graduate/Executive Education courses at: The University of Auckland, Columbia University (New York), New York University (NYU), London School of Economics (LSE) and the Harvard Kennedy School in Boston, Massachusetts.

119

NZRLC - Management Company Bios

Richard Milsom Director

Hayden Dillon Director

Shelley Ruha Independent Chair

Richard Milsom is a founder and director of New Zealand Rural Land Management Limited. Richard is currently the CEO at Bellevue Enterprises - a bovine genetic improvement business with interested in Dairy Farming, Porcine Genetics, Pork sales and commercial property. He is also a consultant at global investment management firm Elevation Capital Management Limited (www. elevationcapital.co.nz), at Elevation Capital Richard was deployed into special situation investments among other responsibilities. Richard has been involved in a number of industries including tourism, agriculture/ biotechnology and fine art Auction Houses – in functions ranging from finance, to marketing, to strategy, to strategic review and implementation. Richard holds a BCom in Finance and Economics from The University of Canterbury, with a post graduate certificate in Value Investing from Columbia University (New York) and Agricultural Businesses and Leadership from Harvard Business School (Boston). Richard is currently on the board of the Institute of Finance Professionals New Zealand (www.infinz.com) and was recently recognised within the financial services industry by being awarded the INFINZ – Emerging Leader Award 2017.

Hayden Dillon is a founder and director of New Zealand Rural Land Management Limited. Hayden is the Independent Director on various large scale Dairy farms in Canterbury and Southland which produce over 7 million milks solids in production and includes New Zealand’s largest Organic Milk producer. He also chairs Bicoeta, an Anaerobic Digestion company, is a trustee of the South Waikato Investment Fund where he chairs their risk committee which is responsible for their $26M fund, and is an Independent director on Rowing New Zealand. Hayden is an experienced advisor with over 20 years in providing governance, structural, financial, and risk management advice. He is currently the Managing Partner for Findex Waikato and Heads Agribusiness New Zealand for Findex. Hayden has held key finance and management roles, with the Bank of New Zealand as a Senior Partner and the National Australia Bank, specifically NAB Agribusiness, which saw him specialise in Farming through to NAB’s Corporate Bank, and their Food and Fibre Sector Portfolio based in Melbourne.

Shelley Ruha is an independent director of New Zealand Rural Land Management Limited appointed in April 2020. Shelley is a director Heartland Bank, and 9 Spokes International. Shelley’s governance experience includes businesses involved in fintech, large scale technology infrastructure and payments innovation, wealth management, venture capital and education based growth for SMEs. Shelley has extensive banking experience in the New Zealand market. Her last role as an executive was leading BNZ Partners, which spanned all aspects of business banking and wealth management for Bank of New Zealand.

120

NZRLC - Service Providers

Accounting:

Legal:

Audit*:

Share Registrar:

*Auditors are yet to be finalised by NZRLC as at 30 April 2020.

121

NZRLC - Key Features

Initial WALT â&#x20AC;&#x201C; 10 to 15 years

Semi-Annual Dividend Payments + Potential NTA Growth

Direct (Compliance) Listing on NZX within 12 months after capital raise - by 30 June 2021

Prior to listing will be seeking Listed PIE status with the IRD*

(Subject to regulatory approvals)

122

NZRLC - Annual Cost Estimates NZRLC is targeting minimum lease income of 4.5% per annum to enable payout of a minimum 3.5% gross dividend yield to investors. NZRLM has summarised below a breakdown of estimated costs on a per annum basis. Costs / Functions

% per annum or NZ$ per annum (+GST)

On Farm Capex

0.25%

Management Fee*

0.50%

Accounting & Registry

$75,000

Audit

$50,000

Independent Directors

$150,000

Other Costs (incl. Independent Director Additional Costs)

$50,000  $100,000

Listing & Legal Fees

$150,000  $200,000

*NZRLM SERVICES PROVIDED UNDER MANAGEMENT FEE • Governance Support (including Companies Office and NZX Requirements) • Reporting to stakeholders and directors • Maintenance of secondary market • All communication with the board of directors • All communication and coordination of capital work (when and if required)

• Regular property inspections and reporting to the board on any matters arising from such inspections • Procuring tenants, maintaining relationships • Property sourcing & Due Diligence • Transactional management and execution

• Monitoring of lessee obligations

123

NZRLC - Overall Budget (4 Farms) Based on NZRLC Total Assets NZ$106.6M (NZ$77.3M Equity + NZ$29.3M Debt) Cash Flow Statement

Milk Solids Per Ha. (Average Efficient)

1150

New Zealand Rural Land Company

Lease Payment Per Ha.

$1,416

Total Ha.

3,388

NZRLC Total Asset Value

$106,609,067

Period Q1

Total

Cash Inflows: Lease Income Total Cash Inflow:

$1,199,352

$4,797,408

Property Gearing Ratio

27.50%

1,199,352

4,797,408

Interest Cost

3.20%

Total Debt

$29,317,493

Total Equity

$77,291,573

Management Fee

0.50%

Total Audit

$50,000

Total Independent Directors

$150,000

Cash Outflows: CAPEX Management Fee Interest Cost Independent Directors Accounting & Registry Audit Other Expenses Listing & Legal Fees Total Cash Outflow: Pre Tax Net Cash Flow: Pre Tax Cash Yield on Equity:

$695,348

$66,600 96,614 234,540 37,500 18,750 12,500 37,500

$66,600 96,614 234,540 37,500 18,750 50,000 12,500 37,500

$266,400 386,458 938,160 150,000 75,000 50,000 50,000 150,000

(504,004)

(554,004)

(2,066,018)

$695,348

$645,348

$2,731,390

Total Independent Directors Other Costs $50,000 Total Accounting & Registry Fee

$75,000

Total Listing Fees & Legal Fees

$150,000

Total Farms

3.53%

124

NZRLC - Overall Budget (8 Farms) Based on NZRLC Total Assets NZ$213.2M (NZ$154.6M Equity + NZ$58.6M Debt) Cash Flow Statement

Milk Solids Per Ha. (Average Efficient)

1150

New Zealand Rural Land Company

Lease Payment Per Ha.

$1,416

Total Ha.

6,776

Period Q1

Total

NZRLC Total Asset Value

Cash Inflows: Lease Income Total Cash Inflow:

$2,398,704

$9,594,816

Property Gearing Ratio

27.50%

2,398,704

9,594,816

Interest Cost

3.20%

Total Debt

$58,634,987

Total Equity

$154,583,147

Management Fee

0.50%

Total Audit

$50,000

Total Independent Directors

$150,000

$213,218,133

$2,398,704

$1,471,945

$133,200 193,229 469,080 37,500 18,750 25,000 50,000

$133,200 193,229 469,080 37,500 18,750 50,000 25,000 50,000

$532,800 772,916 1,876,320 150,000 75,000 50,000 100,000 200,000

(926,759)

(976,759)

(3,757,035)

$1,471,945

$1,421,945

$5,837,781

Total Independent Directors Other Costs $100,000 Total Accounting & Registry Fee

$75,000

Total Listing Fees & Legal Fees

$200,000

Total Farms

+3.78%

125

NZRLC is now ready to progress with capital raising

Signed MoUâ&#x20AC;&#x2122;s with Quality Counterparties

Preliminary Due Diligence Undertaken

Draft Lease Terms Agreed

Structure and Offer Appealing to Major Banks and Relationships Established

126

NZRLC Target Capital Raising and NZX Listing Timeline

Final documentation and offering memorandum completed

May 2020

Roadshows begin

Binding Commitments Received

NZRLC will be listed on NZX (subject to regulatory approvals)

May / June / July 2020

31 July 2020

30 June 2021

127

RISKS

128

NZRLC - Risks Risks

Explained

Mitigants

Page Reference

Tenant/Lessee Default

NZRLC as the landowner is reliant on the counterparty/ tenant being willing and able to pay its lease obligations. The counterparty/tenant is exposed to milk price fluctuations and sustained low prices could adversely affect their ability to pay.

NZRLC has stringent criteria around tenant/counterparty selection alongside regular monitoring.

See pages 104111 & 113

Lease Renewal

The tenant/lessee may not renew the lease and therefore a new tenant will need to be found.

This risk is mitigated by the initial 10 year lease and NZRLC expects to maintain a back-up counterparty list as it builds its portfolio and reputation

Financial Risks

The risk of interest rates increasing and/or the risk NZRLC will be unable to repay debt.

This risk is mitigated by capping debt at 30% of Net Asset Value.

Regulatory Risk

Risks related to surrounding government and local government actions. Direct and indirect taxes, regulations for health and safety, regulations applying to buildings and changes to environmental regulations.

Regulatory risk exists with most investments. Current Regulations are factored into the Due Diligence process and purchase price. By maintaining a focus on higher quality assets risks are mitigated.

Land Values

The market value for rural land is influenced by interest rates, returns from the alternative investments which results in capital exiting the sector and the health of the New Zealand economy and the regions where land is held.

NZRLC manages this risk by making sure it has a tenant / counterparty that pre-commits to pay the required gross lease rate based on the land at the time of acquisition, if not, the land will not be acquired.

129

NZRLC - Risks 6

Environmental Risks

See Pages 58 - 62

See Pages 58 - 66

Social Risks

See Pages 58 + 63

See Pages 58 - 66

Political Risks

See Pages 58 + 64

See Pages 58 - 66

Bio security Risks

See Pages 58 + 65

See Pages 58 - 66

Climate Change

See Pages 58 + 66

See Pages 58 - 66

Milk Price Fluctuations

Fluctuating Milk Price can have short-term negative movements and cause loss of Dairy Farm Income.

NZRLC has operational counterparties - no direct exposure

CAPEX Overspend

CAPEX is beyond what is budgeted and decreases cash returns to investors.

See Page 114

130

NZRLC - Risks Milk Price Decline (Long Term)

Dairy Farm Values are linked to their operating income which is directly impacted by global and domestic milk prices.

Alternative use for land - assessed during Due Diligence / Purchase and widening forecast global dairy deficit likely to increase prices.

Co-op Milk Supply Share Decline

Co-op Shares held for milk supply (ie Fonterra) may decline in price and are a Dairy Farming Asset.

NZRLC will own no Co-op shares - these will be owned by the operators the operators will have sufficient equity to withstand asset price decline.

Dairy Cow Value Decline

Dairy Cows owned for milk supply may decline in price and are a Dairy Farming Asset.

NZRLC will own no Dairy Cows - these will be owned by the operators. The operators will have sufficient equity to withstand asset price decline.

Environmental Regulations Increasing

Environmental Regulations may become more onerous and decrease Dairy Farm land value that suffers decreased production capacity as a result.

These regulations are largely known and able to be factored in when purchasing land which NZRLC has built into its Due Diligence process. NZRLC is only targeting quality farming assets less likely to be affected. Risks will be factored into purchase price.

Tenant not completing Repairs & Maintenance (R&M).

Dairy Farm Values can be decreased by Repairs and Maintenance not being completed.

NZRLC will have contractual obligations in the lease that are explicit and adherence to these will be monitored and managed by NZRLM.

COVID-19

It is clear that Covid-19 and the significant escalation of government protection measures across the world will have a material impact on the global economy. NZRLC considers that there are risks and opportunities to be had as a result of Covid-19. The major risk is that of weakness in commodity prices for a prolonged period of time would clearly weigh on land prices.

NZRLCâ&#x20AC;&#x2122;s ownership of land and separation of on-farm operations reduces its short to medium term exposure to commodity price volatility. Having well financed operators provides a further mitigant for NZRLC as they can be expected to weather commodity price volatility better than most operators within the sector. Additionally, farming has been determined an essential service and on-farm production is continuing and therefore revenue is still being generated. Long-term lower commodity prices is likely to be detrimental to land values which is a risk for investors.

See Pages 110113

131

APPENDICES

132

Appendices DONâ&#x20AC;&#x2122;T BELIEVE US? - KEITH WOODFORD ON RADIO NZ JANUARY 2019

NEW ZEALAND AGRICULTURE SUB-SECTOR ASSET CYCLES

COMPARABLE OFFERS / COMPANIES

RARE EXCEPTION RURAL EQUITIES (REL) www.usx.co.nz

NEW UK OFFER - THE GLOBAL SUSTAINABLE FARMING INCOME TRUST PLC VS NZRLC

DAIRY ASSETS IN A BALANCED PORTFOLIO

SHARE OF CALORIES FROM ANIMAL PROTEIN VS. GDP PER CAPITA (ENLARGED FROM PAGE 32)

NATURAL ENVIRONMENT IDEAL FOR DAIRY FARMING (ENLARGED FROM PAGE 51)

HISTORICALLY INVESTING IN AGRICULTURE IN NEW ZEALAND HAS BEEN DIFFICULT

PRESS

133

Donâ&#x20AC;&#x2122;t believe us?

Keith Woodford on Radio NZ - 7 January 2019 Keith Woodford is an independent consultant who holds honorary positions as Professor of Agri-Food Systems at Lincoln University and Senior Research Fellow at the Contemporary China Research Centre at Victoria University. His archived writings are available at www.keithwoodford.wordpress.com

Source: keithwoodford.wordpress.com https://www.rnz.co.nz/national/programmes/summer-days/audio/2018729210/concern-over-dairy-farm-valuations https://www.rnz.co.nz/audio/player?audio_id=2018729210

134

New Zealand Agriculture Sub-Sector Asset Cycles confirms the opportunity is most attractive in Dairy Farms at present (Compound Annual Growth Rate)

135

Comparable Offers - Listed Name

WALT (Years)

Debt to Assets %

+3.50%

10 ď&#x161;ş15

30%

Goodman Property Trust (GMT)

4.4%

5.1

25%

Asset Plus Limited (APL)

8.0%

5.5

33%

Property for Industry (PFI)

4.6%

5.4

33%

Precinct Properties New Zealand Limited (PCT)

5.0%

8.7

34%

Stride Property Limited (SPG)

6.2%

5.0

34%

Kiwi Property Group (KPG)

6.4%

5.2

37%

Argosy Property Limited (ARG)

6.4%

6.1

38%

Augusta Capital Limited (AUG)

6.1%

5.8

40%

Investore Property Limited (IPL)

5.8%

12.4

42%

Vital Healthcare Property Trust (VHP)

4.9%

18.2

45%

Rural Funds Group (Australia)

5.7%

11.0

36%

NZRLC Proposed

Source: Refinitiv Eikon and Company Annual Reports as at 24 December 2019

Gross Dividend Yields

136

Comparable Offers - Unlisted Booster Private Land and Property Fund (PLPF)

MyFarm GCF Investments LP

MyFarm PRD Investments LP

MyFarm LLP Investments LP

MyFarm HLP Investments LP

MyFarm Waimarie Manuka LP

MyFarm Aporo Iti Orchard LP

Craigmore Permanent Crop Partnership

New Zealand Rural Land Company Limited

Debt

Maximum 65%; Target 40%

30%

33%

30%

32%

7.5%

30%

Maximum 30%

Management Fee

1.00% p.a

0.50% p.a

$5,000 p.a. (0.50%)

$5,000 p.a. (0.25%)

0.50% p.a.

1.05% p.a.

0.50% p.a.*

Transaction Fee Performance Fee

NIL

3.50%

5.50%

5.00%

NIL

1.25%**

NIL

5% of distributions from 5% of Partnership distributions including year 5 onwards any capital uplift if sold

"20% carried over interest over a 7% preferred, no catch up" (quote)

Other Costs

Operations fee: 3.61% p.a Expenses: 0.1% p.a. Exit Fee 1%-5%

NIL

Indicative costs: $2,500 p.a. Supervision fees: $50,369 p.a. ($70/cow)

Indicative costs: Supervision Fee: 1% $2,500 p.a. Supervision fees: $55,000 p.a. ($65/cow)

Asset profile

Diversified includes

23.34% of a single asset

21.58% of a single asset

13.35% of a single asset 15.74% of a single asset

Two Manuka Plantations

Agricultural land Horticultural land Industrial property Commercial property Retail properties

228 h. a. Dairy Farm

181 h. a. Dairy Farm

260 h. a. Dairy Farm

216 h. a. Dairy Farm

1,638 h. a.

Risks

On farm operations Livestock Global commodity prices Cooperatives performance Counterparty Leverage

Targeted Total Returns

Projected: +8%

Actual: +2.91% in 2015 Actual: 0% since 2016 NA and 0% since 2016

One-off third party costs: $206,900

NIL

10% of asset appreciation from cost basis calculated annually, paid in shares (50% escrowed for 5 years). High water mark applies.

Apple Orchard

Diversified - includes

35 canopy hectares with 83,300 trees

Kiwifruit, Apples Wine

• • • • •

On farm operations Global commodity prices Development Risk Sharefarming Risk (ComVita) Leverage

On farm operations Global commodity prices Development Risk Licensee Risk with Rockit Global Ltd Leverage

On farm operations Global commodity prices Cooperatives performance Counterparty Leverage

Counterparty Leverage

Projected: +7.6%

Projected IRR +15%

Projected: +12% - +14%

Projected: +6.50% to +8.00% of which +3.50% is the forecast gross dividend yield to be paid quarterly.

Source: NZRLC + Company specific / Scheme specific Product Disclosure Statements. *Management Fee - 0.5%. Management Fee excludes NZRLC audit & accounting costs, listing costs and subsequent capital raising costs, Independent Director costs, Independent Valuer costs, and any other costs required for Independent Directors to perform their functions. **Transaction Fee - Up to 1.25%. Excludes any costs related to acquisition or disposal of assets for Independent Directors including Independent Valuers or other professional services utilised by Independent Directors to perform their functions.

Dairy (currently) Sheep & beef Horticulture + Viticulture Forestry Other

137

Comparable Offers – Management Fees Comparable Offers – Management Fees MyFarm - HLP Investments LP 0.5% on Net Asset Value

New Zealand Rural Land Company (NZRLC) MyFarm - Wimarie Manuka LP Augusta Industrial Fund Ltd MyFarm - PRD Investments Ltd MyFarm - GCF Investments Goodman Property Trust (GMT) MyFarm - Aporo Iti Orchard LP MyFarm - LLP Investments LP Investore Property Limited (IPL) Precinct Properties New Zealand Limited (PCT) Oyster Group - Direct Property Fund Property for Industry Limited (PFI) Vital Healthcare Property Trust (VHP) Booster Private Land and Property Fund (PLPF) Rural Funds Group (RFF - Australia) Craigmore Permanent Crop Partnership 0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

Source: NZRLC + Company specific / Scheme specific Product Disclosure Statements. Management Fee - 0.5%. Management Fee excludes NZRLC audit & accounting costs, listing costs and subsequent capital raising costs, Independent Director costs, Independent Valuer costs, and any other costs required for Independent Directors to perform their functions.

1.2%

138

Comparable Offers – Transaction Fees Comparable Offers – Transaction Fees Rural Funds Group (RFF - Australia) Craigmore Permanent Crop Partnership Booster Private Land and Property Fund (PLPF) Property for Industry Limited (PFI) Investore Property Limited (IPL) Goodman Property Trust (GMT)

(The acquisition and disposal fee is agreed to by Directors on a case by case with the maximum being 1%)

Precinct Properties New Zealand Limited (PCT) Augusta Industrial Fund Ltd New Zealand Rural Land Company (NZRLC)

(1.25% on acquisitions and divestments)*

Vital Healthcare Property Trust (VHP)

(Since 31 October 2019)

Oyster Group - Direct Property Fund MyFarm - HLP Investments LP MyFarm - LLP Investments LP MyFarm - PRD Investments Ltd MyFarm - GCF Investments MyFarm - Aporo Iti Orchard LP MyFarm - Waimarie Manuka LP 0.0%

1.0%

2.0%

3.0%

4.0%

Source: NZRLC + Company specific / Scheme specific Product Disclosure Statements. *Transaction Fee - Up to 1.25%. Excludes any costs related to acquisition or disposal of assets for Independent Directors including Independent Valuers or other professional services utilised by Independent Directors to perform their functions.

5.0%

6.0%

7.0%

139

Comparable Offers – Performance Fees Comparable Offers – Performance Fees Rural Funds Group (RFF - Australia) MyFarm - PRD Investments Ltd MyFarm - GCF Investments MyFarm - HLP Investments LP MyFarm - Aporo Iti Orchard LP MyFarm - LLP Investments LP Booster Private Land and Property Fund (PLPF) MyFarm - Wimarie Manuka LP New Zealand Rural Land Company (NZRLC)

- Paid in shares - 50% Escrow for 5 years

Vital Healthcare Property Trust (VHP) Property for Industry Limited (PFI) Investore Property Limited (IPL) Precinct Properties New Zealand Limited (PCT) Augusta Industrial Fund Ltd Goodman Property Trust (GMT) Craigmore Permanent Crop Partnership Oyster Group - Direct Property Fund 0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Source: NZRLC + Company specific / Scheme specific Product Disclosure Statements.

140

Historically, investing in Agriculture in New Zealand has been difficult A long list of disappointing investor returns and negative headlines

141

This has seen much criticism delivered over the yearsâ&#x20AC;¦ and all valid BRIAN GAYNOR

MATTHEW HOOTON

KEITH WOODFORD

142

Listed/Unlisted predecessors saw investors exposed to commodity prices and on-farm activities Predecessors

Date Established

Structure

Exposure to on-farm operations

Direct exposure to commodity prices

Exposure to livestock

Exposure to milk processors/Co-ops

Outcome

New Zealand Rural Property Trust

1987

Open-ended trust

YES

Acquired by Rural Equities on 4 December 2009

Dairy Brands

1995

Listed in 1986

YES

Liquidation 28 October 2005

Tasman Agriculture

1988

Listed in 1992

YES

Liquidation 9 May 2003

(Previously Apple Fields)

(Brierley Investments bought a 50% share in 1990.)

143

Rural Equities (REL) - www.usx.co.nz

Total Return - Since 15 March 2004 $5.00

Annualised Total Return: +11.02% p.a. $4.00

$3.00

$2.00

$1.00

SEP19

DEC19

JUN19

MAR19

SEP18

DEC18

JUN18

MAR18

SEP17

DEC17

JUN17

MAR17

SEP16

DEC16

JUN16

MAR16

SEP15

DEC15

JUN15

MAR15

SEP14

DEC14

JUN14

MAR14

SEP13

DEC13

JUN13

MAR13

SEP12

DEC12

JUN12

MAR12

SEP11

DEC11

JUN11

MAR11

SEP10

DEC10

JUN10

MAR010

SEP09

DEC09

JUN09

MAR09

SEP08

DEC08

JUN08

MAR08

SEP07

DEC07

JUN07

MAR07

SEP06

DEC06

JUN06

MAR06

$0.00

Rural Equities Limited (REL) is a unique example which illustrates exposure to New Zealand rural land can provide satisfactory returns to long-term investors when coupled with sound management focused on long-term capital growth and income. The company was spun-off from Williams & Kettle Limited to act as a manager of New Zealand Rural Property Trust (NZRPT), which owned a diversified portfolio of rural land with net assets of $120million as at 30 June 2004. REL merged with NZRPT in 2009 and has actively managed its portfolio with divestments and buybacks to produce an annualised total return since listing (on the unlisted market www.unlisted.co.nz) of +11.02% per annum. Source: www.usx.co.nz

144

Rural Equities (REL) - www.usx.co.nz

Share Price vs Net Asset Value (NAV) Per Share

$7.00

$6.00

$5.00

NZD

13Y Annualised Rate of Return

Completed merger with NZRPT* on 04/11/2009

NAV: +10.26%

$4.00

Share Price: +10.30% $3.00

$2.00

Discount as at 31/12/2019 -17.51% ($0.97 cps)

Max. Discount -39.60% ($1.77 cps)

Average Discount since REL listed on USX: -7.07% ($0.39 cps) Average Discount since merging with NZRPT*: -20.74% ($1.05 cps)

$1.00

Min. Discount -2.34% ($0.03 cps) 0 2004

2005

Source: www.usx.co.nz *NZRPT = New Zealand Rural Property Trust

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

145

New UK Offer - The Global Sustainable Farmland Income Trust PLC (GSFIT) vs. NZRLC KEY FEATURES

GSFIT

NZRLC

Issue Size Debt

USD 300 Million

NZD $200 Million (Minimum NZ$ 75 million)

Maximum: 30%; Target: 10%

Maximum 30%

Management Fee

Up to USD 200 Million: USD 200 Million - USD 300 Million: USD 300 Million - USD 500 Million: USD 500 Million - USD 750 Million: Above USD 750 Million:

% of adjusted Net Asset Value

1.25% 1.15% 1.10% 1.00% 0.95%

0.50% p.a.*

Transaction Fee Performance Fee

NIL

Other Costs

Initial Formation & Issue: 1.4% of Gross Proceeds Cash & Cash Equivalents: 0.35%

NIL

Asset profile

Diversified includes • Grassland (Grazing & Livestock) • Woodland (Forestry) • Annual Row Crops • Permanent Crops • Speciality Crops Target Geographies include North America, Australia, New Zealand, UK, Europe, Latin & South America Up to 10% of Gross Asset Value can be invested in listed equities, listed debt, private debt and listed closed ended investment funds directly or indirectly related to agriculture, if deemed to be the optimum way to gain exposure to a particular crop type / geography

New Zealand, includes • Dairy (currently) • Sheep & beef • Horticulture + Viticulture • Forestry • Other

Risks

Political & Regulatory Risk in multiple target geographies Concentration Risk (Geography, Tenant, Crop Types, Farmland Assets) Global Agricultural Market, Commodity Prices, Economic Conditions Currency Risk Counterparty Risk Leverage

Counterparty Leverage

Projected net total returns: +7% to +8% p.a. which includes a Dividend Yield Dividend projected 2.5% p.a. up to Sept 2020 progressively increasing to 4.25% up to Sept 2022

Projected: +6.50% to +8.00% of which +3.50% is forecast to be pre-tax dividend yield.

Targeted Total Returns

NIL

1.25%** 10% of asset appreciation from cost basis (calculated annually, paid 50% shares escrowed for 5 years. High water mark applies).

*Management Fee - 0.5%. Management Fee excludes NZRLC audit & accounting costs, listing costs and subsequent capital raising costs, Independent Director costs, Independent Valuer costs, and any other costs required for Independent Directors to perform their functions. **Transaction Fee - 1.25%. Excludes any costs related to acquisition or disposal of assets for Independent Directors including Independent Valuers or other professional services utilised by Independent Directors to perform their functions.

146

Dairy Assets in a balanced portfolio Rural Land Assets in a Balanced Portfolio Return on New Zealand Agricultural Land and Inflation (%, base year 1988) 4.5%

Investing in New Zealand land is still nascent. Investors in the past have been deterred by high up front capital outlays, direct commodity price exposure, on-farm risks (including weather and animal health) and, a lack of liquidity. These barriers have prevented many investors from diversifying their portfolios to include this high-quality asset that offers attractive longterm returns, an effective inflation hedge and uncorrelated returns to broader investment markets.

Uncorrelated returns If we look at dairy farms as one sub-sector of rural land, dairy farmsâ&#x20AC;&#x2122; returns exhibit a low correlation with broader investment classes and represent a potentially attractive counter-cyclical investment (refer to the chart below for a comparison between the yields on the New Zealand dairy farms versus JUN 94 the JUN 95S&P JUN 94 500). 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 JUN 11 JUN 12 JUN 13

4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% JUN 93

Standard deviation of returns

Attractive long-term returns - refer to page 10

Farm Prices

JUN 15

JUN 16

JUN 17

Returns on New Zealand dairy farms versus the S&P 500 (%) Return on assets New Zealand dairy farms*

JUN 14

Inflation

Return on the S&P 500

50%

New Zealand All Farm Type Price Index*

40%

New Zealand dairy farms

+6.52% p.a

4.500 4.000

30%

16%

20% 10%

3.500

S&P 500

3.000

-10%

2.500

2.8%

2.000 1.500

Correlation of dairy farm and S&P 500 returns

1.000 500

-20% -30% -40% JUN 00

JUN 01

JUN 02

JUN 03

JUN 04

JUN 05

JUN 06

JUN 07

JUN 08

JUN 09

JUN 10

JUN 11

JUN 12

JUN 13

JUN 14

JUN 15

JUN 16

JUN 17

0 MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP MAR SEP DEC MAR JUN SEP MAR SEP MAR SEP MAR SEP 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12 13 13 14 14 15 15 15 16 16 16 17 17 18 18 19 19

Source: Dairy NZA Economic Surveys, Bloomberg

* The return on New Zealand dairy farms includes the return on dairy operations and changes in underlying land values

Effective inflation hedge New Zealand rural land has on average outperformed inflation over the last 25+ years. An investment in rural land can be expected to offer some protection against the unknown (refer chart below). Dairy Assets in a balanced portfolio Return on New Zealand Agricultural Land and Inflation (%, base year 1988)

Farm Prices

Inflation

4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% JUN 93

JUN 94

JUN 95

JUN 94

JUN 96

Standard deviation of returns

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

JUN 11

JUN 12

JUN 13

JUN 14

JUN 15

JUN 16

JUN 17

147

Returns on New Zealand dairy farms versus the S&P 500 (%) Return on assets New Zealand dairy farms*

Return on the S&P 500

Share of calories from Animal Protein vs. GDP per capita (Refer page 32) Share of calories from Animal Protein vs. GDP per capita

Share of total calories from animal protein

10%

4% Africa Asia Europe North America Oceania South America

0 $567

$1,000

Source: https://ourworldindata.org/grapher/share-of-calories-from-animal-protein-vs-gdp-per-capita?

$10,000

GDP per capita

148

Natural Environment – Ideal for Dairy Farming (Refer page 51) New Zealand Mean Annual Sunshine Hours, 1971-2000

New Zealand Mean Annual Temperature (°C), 1971-2000

New Zealand Mean Annual Rainfall (mm), 1971-2000

Sunshine (hours)

Temperature (°C)

Annual Rainfall (mm)

900 -1400 1400-1600 1600-1800 1800-2000 2000-2200 2200-2600

<2 2.1-4 4.1-6 6.1-8 8.1-10 10.1-12 12.1-14 14.1-16 16.1-18

Kilometres 0 50100 200 300 400 500

Source: https://niwa.co.nz/education-and-training/schools/resources/climate/overview

<500 500-750 750-1000 1000-1250 1250-1500 1500-2000 2000-4000 4000-10000

Kilometres 0 50100 200 300 400 500

149

Press - Recent Rabobank Report Confirms Dairy Land Price Headwinds • Rabobank recently released (January 2020) a report on dairy land prices, “Afloat but Drifting Backwards”, which aligns with our view on the combination of headwinds impacting dairy land prices. • In the report, Rabobank expects dairy land prices to be pushed lower by tighter credit availability, reduced flows of foreign capital, and tougher environmental standards/negative sentiment.

Overseas Investors Blocked “Foreign Buyer Ban”

Widespread Negative Sentiment on the Sector

Impacting Land Prices

Banks Reducing Credit To The Sector

150

Press - Recent Rabobank Report Milk Price Forecast is Conservative • NZRLC’s 10 year forecast for average milk price (2019-2029) (NZ$8.47-NZ$9.42) uses a constant currency basis in conjunction with the OECD-FAO Agricultural Outlook 2019-2028 report (see page 43). • NZRLC believes a widening dairy deficit and New Zealand’s natural and sustainable dairy product will support an increased average milk price over the next ten years. • For context, FY2019 milk price was NZ$6.25 (Fonterra) and FY2020 is forecast to be NZ$7.00 - NZ$7.60 (see page 72). • The recent Rabobank report (January 2020) references a forecast average farmgate milk price of NZ$ 6.25 /kgMS over the next five years (from 2019-2024), but with no reference to calculation. We believe this is either an internal measure to assess serviceability / viability of lending or is based on historical milk prices (see page 72). • Also noteable, and supportive of NZRLC’s projections based on OECD-FAO Agricultural Outlook Data, is ASB Economist Nathan Penny who refers to an NZ$8.00 Milk Payout in the immediate future (NZ Herald - 13 January 2020)**. Average Global Price Projections by OECD-FAO USD per ton 6000 5000 4000

+16%

ASB Economist Nathan Penny references NZ$8 Milk Payout in the immediate future**.

+16% +29%

3000

+22% 2000 1000

Butter Cheese Whole milk powder Skim milk powder

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Source: The changing landscape of farming and banking, ASB, 2019; Source: OECD-FAO Agricultural Outlook 2019-2028 - http://www.fao.org/3/ca4076en/ca4076en.pdf; * Fonterra Latest Farmgate Milk Prices; https://www.fonterra.com/nz/en/investors/farmgate-milk-prices.html **https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12299746

151

Press

https://www.theguardian.com/environment/2020/jan/07/honeybees-deaths-almonds-hives-aoe#top

152

Press

153

Press

https://www.interest.co.nz/rural-news/102761/its-latest-financial-stability-report-reserve-bank-says-options-address-excessive

https://www.stuff.co.nz/national/the-detail/116100315/the-detail-nzfarmers-down-in-the-dumps-over-environmental-issues https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12294249

https://www.rnz.co.nz/news/country/399087/anz-rules-out-sale-of-rural-debt-to-foreign-hedge-funds https://www.ruralnewsgroup.co.nz/rural-news/rural-opinion/government-policy-rule-changes-are-hitting-farmers-in-the-pocket

https://www.newshub.co.nz/home/rural/2019/08/farm-sales-continue-to-drop-down25-percent.html

154

Press

https://www.interest.co.nz/rural-news/98765/farm-sales-volumes-down-36and-median-price-hectare-down-184-year-year-reinzs

https://www.interest.co.nz/rural-news/98043/keith-woodford-explains-decisions-andbehaviours-have-led-dairy%E2%80%99s-debt-laden-pickle

https://www.newshub.co.nz/home/rural/2019/07/farm-sales-atlowest-level-in-over-four-years.html

https://www.odt.co.nz/rural-life/rural-life-other/clampdown-foreign-farm-buyers-scares-investors

https://www.nzherald.co.nz/the-country/news/article.cfm?c_ id=16&objectid=12166163

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12150852

155

Press

https://www.stuff.co.nz/business/farming/dairy/99592272/keithwoodford-dairy-debt-leaves-farmers-little-headroom https://www.interest.co.nz/rural-news/91259/keith-woodford-discusses-trends-farm-dairy-debtand-challenges-it-creates

https://www.interest.co.nz/rural-news/83547/borrowing-dairy-sector-accounts-exactly-two-thirds-bank-lending-new-zealands

156

Press

https://www.stuff.co.nz/business/farming/114882066/fact-check-are-our-farm-systems-any-better-for-the-climate

157

Press

https://www.stuff.co.nz/business/farming/114882066/fact-check-are-our-farm-systems-any-better-for-the-climate

158

NEW ZEALAND Rural Land Co SUS TAIN ABLE AOTEAROA

New Zealand Rural Land Company 37B George Street

PO Box 28053

+64 9 379 6493

Newmarket

Remuera

info@nzrlc.co.nz

Auckland 1023

Auckland 1541

www.nzrlc.co.nz

New Zealand

159