Major Te Puke kiwifruit orchards marketed to foreign buyers
By Paul McBeth
March 19 (BusinessDesk) - A block of three kiwifruit orchards in Te Puke is being marketed to foreign buyers, despite the new Labour-led government's plans to restrict overseas investment.
Bayleys Real Estate is marketing the Te Matai, Pacific Gold and Coachman orchards in Te Puke, spanning 98 canopy hectares in an international tender, closing on May 3, the realtor said in a statement. The three privately owned orchards are on track to produce 1.2 million-to-1.3 million trays of SunGold G3 and Hayward kiwifruit in roughly equal percentages, or about 0.9 percent of Zespri Group's total supply. That implies payments from Zespri of between $11.4 million and $12.3 million based on the 2017 payment of $9.76 per tray.
Kiwifruit orchard prices have soared since the government and industry response to the Psa bacteria incursion developed a resistant strain, and recent sales of land producing SunGold G3 varieties have gone for between $900,000 and $1 million per hectare, while green kiwifruit orchards able to be converted to gold have sold at $450,000-to-$500,000 per hectare. At an equal split, that implies a sale price of between $66 million and $74 million, not including 102 hectares of grazing land, two residential buildings, plus the option to buy $5.2 million of Zespri shares.
"The sheer scale of this Te Puke portfolio puts the trio of orchards among the biggest commercial kiwifruit operations in New Zealand and is certainly one of the largest that has ever been taken to market in one portfolio," Bayleys managing director Mike Bayley said. "The economy of scale delivered by purchasing this collection of orchards, which are all in close proximity to each other, allows for any new owner to maintain the corporate approach to crop management and production."
Australasia's biggest kiwifruit grower is NZX-listed Seeka, which produced 8.5 million trays in 2017 from its New Zealand orchards. The company last traded at $6.67, giving it a market value of $116.9 million.
The sale comes as policymakers hear submissions on amendments to the Overseas Investment Act bringing residential property and forestry cutting rights into the screening regime and after the government issued a directive to the Overseas Investment Office reducing the size of farms covered by OIO applications.
Bayley said buyers can bid for the entire portfolio or any of the individual properties.