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Americans are biggest investors in NZ dairy land

Media Release: Tuesday 13 October 2015

Americans are biggest investors in NZ dairy land

Embargoed until 5.00am Friday 16 October 2015

United States investors were the largest investors in our dairy land during 2013-2014, analysis by KPMG has revealed.

In the report on Overseas Investment in New Zealand’s Dairy Land, KPMG has analysed Foreign Direct Investment (FID) decisions by the Overseas Investment Office (OIO) for the 2013-2014 period.

It shows that the US was the largest investor in dairy land during that two-year period – accounting for 54.4% of the freehold hectares sold, and 26.5% of the consideration paid.

Justin Ensor, KPMG Deal Advisory Partner, says this highlights a common misconception about offshore investment in our dairy farms.

“There is a widespread perception that it’s a thin market – comprised of Chinese and Hong Kong investors - who are buying New Zealand dairy land. In reality, though, the market has a broad base of investors.”

China accounted for only one of the 24 transactions for dairy land approved by the Overseas Investment Office (OIO). That was the major acquisition of Synlait Farms, which accounted for 11.7% of hectares sold, and 21.3% of consideration paid.

Earlier this year, the Government rejected an $88 million bid from Pure 100 Farm Ltd - a subsidiary of Chinese-owned Shanghai Pengxin – because the benefits to New Zealand were not “substantial and identifiable.”

In key findings from KPMG:



• The US accounted for 54.4% total freehold hectares purchased by overseas investors in 2013/2014. This was followed by China (11.7%), and Sweden (5.9%); with the remaining investment comprised of 11 other countries.

• The United States accounted for 26.5% of consideration paid for dairy land, followed closely by China (21.3%).

• Total disclosed consideration during the period was approximately $297 million.

Ends

About the report

This report covers OIO approvals for dairy land acquisitions over the period January 2013 to December 2014. The review is limited to those acquisitions where there is disclosure of the parties, consideration and land area. KPMG estimates that this provides coverage of approximately 80% of the total dairy land acquired.

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