Ingka Group firms granted consent to buy land
COMPANIES associated with Ingka Group, the largest franchisee of Ikea stores internationally, are continuing their search for southern farmland to convert to forestry.
Yesterday, decision summaries for December were released by the Overseas Investment Office which showed Ingka Investments Forest Assets NZ Ltd and Ingka Investments Management NZ Ltd were granted consent, under the special forestry (oneoff purchase) test to acquire a freehold interest in just over 407ha of land, farmed as a sheep, beef and deer operation, on the LillburnMonowai Rd at Tuatapere.
The purchasers planned to establish and maintain a total of about 271.3ha of rotation forest over the 2023 and 202425 planting seasons. The trees would be harvested after about 27 to 30 years and replanting would occur following harvest, the decision said.
Part of the land better suited to farming, which was about 48ha, would be subdivided and sold. The remainder of the land would be unplanted, including 54.4ha of native bush, buffer land, setbacks, riparian areas, roads and tracks. The land was a mix of Land Use Capability class 3 (77ha), class 5 (38ha), class 6 (284ha) and class 7 (8ha).
The vendors were Lindsay John Wilson and Glenda Elizabeth Wilson as trustees of the Hollyburn Family Trust (Wilson), and Paul David Marshall and Peter Robert Jordan (Marshall). The price was withheld under the Official Information Act.
In an accompanying note to the decisions, Toitu Te Whenua Land Information New Zealand head of regulatory practice and delivery Rebecca McAtamney said when it came to decisions around investments that converted farmland to forestry, complex foreign investment rules ‘‘can make it hard to see the forest for the trees’’.
‘‘One of the biggest misunderstandings is that farmland converted to forestry blocks can be used for permanent forests — often referred to as carbon farms. This is not the case,’’ Ms McAtamney said.
Under the Overseas Investment Act 2005, farmland being converted to forestry must be used for producing timber, a process that included planting, maintaining, and harvesting trees within set timeframes.
‘‘It’s just one of many controls in place to help ensure overseas investments in forestry benefit New Zealand. In August 2022, the rules for overseas investments in forestry changed, making it harder for foreign investors to purchase New Zealand farmland for conversion because they must now meet the stricter benefit to New Zealand test.
‘‘Our overseas investment team is responsible for considering foreign investment applications, and also ensuring that successful investors abide by the rules,’’ she said.
The introduction of the special forestry test, and its subsequent removal, resulted in applications from foreign investors wanting to buy farmland for conversion to forestry. This year, it was expected to see a slowdown in those types of applications.
Foreign applications to convert farmland to permanent forestry — such as to earn carbon credits — must meet the farmland benefit test that required applicants to demonstrate the benefits were ‘‘significantly higher’’ than the current state.
Under the benefit to New Zealand test 29 foreign investor applications for farmland to forestry conversions had been approved between 2011 and 2019, totalling 21,652.9ha, and 72 applications under the special forestry test, between 2019 and 2022, totalling 66,452.6ha, provided data showed.
In December, Ingka Investments Forest Assets NZ Ltd and Ingka Investments Management NZ Ltd were also granted consent to acquire a freehold interest in 259.25ha of forestry land at Cook Forest at Beaumont, and in 453.21ha of land used for forestry and silviculture purposes in the Whanganui district.
Meanwhile Malaysianowned Pine Plantations Private Ltd was granted consent to acquire a freehold interest in 247.13ha of land in Harrison Rd, Tuatapere, for $2.9 million.
The land, sold by Livestock Ventures Ltd, was used for sheep and beef farming, dairy grazing and fattening of Wagyu cattle. It was intended to establish and maintain about 154.38ha of commercial plantation forest, predominantly radiata pine.
About 4ha would be subdivided and sold. The residual land contained 88.71ha of native bush.
Consent was also granted for Austrian forestry investor Johannes TrauttmansdorffWeinsberg to buy a 827.95ha sheep and beef farm in the Ruapehu district for just over $14 million as an investment in commercial forestry.
❛ One of the biggest misunderstandings is that farmland converted to forestry blocks can be used for permanent forests — often referred to as carbon farms. This is not the case