New Zealand Rural Land Co is seeking to raise $20.38 million to buy two Southland dairy farms.

The capital raise will be in the form of a pro-rata accelerated renounceable entitlement offer.

Under its terms, participating shareholders will get one new share for every five existing shares at $1.05 per new share - a 6.3 per cent discount to Tuesday's closing price of $1.12.

Chairman Rob Campbell said the acquisitions - for a total price of $29m - represented a continuation of NZ Rural's strategy of broadening its portfolio of high-quality rural land assets.

Following the purchases, NZ Rural's portfolio will comprise about 11,710 hectares of dairy farms across Canterbury, Central Otago and Southland.

"These assets are all underpinned by triple net leases with CPI-linked rental adjustments, resulting in NZRL being well positioned in an inflationary environment," he said.

The 564-hectare Argyle Downs farm is to be leased to a new tenant with CPI linked rent reviews for an initial term of 11 years.

Greenhill (366 hectares) is to be leased to a new tenant with CPI-linked rent reviews for an initial term of 10 years.

NZ Rural Land has been placed in a trading halt on the NZX while the company undertakes the institutional bookbuild element of an accelerated offer.

Last November, New Zealand Rural bought a large scale dairy asset portfolio comprised of six dairy assets in Maniototo, Central Otago totalling approximately 3500 hectares, for $61.40m, funded mostly through debt.

Shares in NZ Rural Land debuted on the NZX in December 2020, at $1.31, a small premium to their $1.25 issue price.