I agree re 4.5% for 5 years.It's a great deal for whoever buys...

I agree re 4.5% for 5 years.

It's a great deal for whoever buys TWE, but a poor deal for D2O.

It's cheaper than borrowing to buy the water rights and as mentioned it provides the lessee insurance against a rise in water costs for 5 years which is a long time.

The opportunity cost for D2O would be pretty high in the event either interest rates rise further or there was a drought. The assert value of these water rights will be discounted heavily in the event of either of those eventualities. Interest rates won;t drop to 0 again, and it's not likely we'll continue flooding rains for a further 5 years.

I think it's a poor deal.

D2O is at some risk of legal scrutiny if they go ahead and buy the vineyards in their other fund.