RFF Management Fee Analysis, page-9

I could be wrong, but I believe that RFF receive an increase as & when the additional capex is made (or shortly after completion of major works/improvements, such as plantings, water & feed infrastructure), rather than waiting for a longer term rent review time. If this wasn't the case they would wait closer to rent review & negotiate to improve then. This is encourage to RFF to improve the property for the value for the tenant to improve its production/carrying capacity.

For that reason I cannot see the tenants agreeing to this unless it was of additional productive benefit to them. The tenant is a 3rd party after all & does not give a damn about RFFs property only what it does for them as a business.

Ultimately RFF is a REIT with a goal of improving the assets its buys; & for such a property they do this by improving the financial income to their tenants (by the improvements) with the tenant not having to spend their own money to do it otherwise (which is not out of the question for certain commercial tenants if in their interests I am aware of). The reason for the more complicated sale & leaseback agreement many have been the subject of many comment is to keep this REIT ATO treatment of income (rather than if running a business), so as to keep the flow through tax status of the REIT. Otherwise the ATO would want their pound of flesh upfront & RFF would have to pay lower dividends (but with some level of franking instead for the tax paid) if mixed in.

I expect that RFF is looking attractive with a sustainable yield, especially as interest rates drop yet again, probably by the end of the year. Companies that can grow income in the coming economical period will be hard to come by. Not withstanding the B & B attacks to try & make their short positions work for them, I think it is significantly undervalued vs the overall REIT sector.

Sorry if off topic a bit, but I still think its somewhat relevant to some of the other discussion had. That's my 2 bobs worth