Foreign investors spend up large
Foreigners are still spending up large on New Zealand land and businesses despite tightened rules by the Labourled Government.
So far this year 76 investments worth a net $2.5 billion have been approved by the Overseas Investment Office (OIO), up from $2b last year across 77 deals. House sales are not included in the figures.
The amount of freehold land sold to foreigners was down almost half on last year at 9964 hectares.
But the sale of Crown leasehold land was nearly four times higher at 39,336 hectares – most of it attributable to the sale of Mt White Station to Czech-born businessman Lukas Travnicek, and approved by Land Information Minister Eugenie Sage.
United States-based investors made the biggest inroads, with net investment of $968 million.
This was followed by Hong Kong at $272m and slightly lower amounts from Switzerland, Philippines and Canada.
The OIO declined two consents this year, compared with none in 2017.
Campaign Against Foreign Control in Aotearoa (Cafca) spokesman Murray Horton said the Government’s rule changes regarding land were far less significant than the amounts invested by overseas corporations in business deals.
Information provided to Cafca shows NZX-listed company CDL Land bought 40ha in Gordonton Rd, Huntington, for $14.6m. The company intends to use the land for a housing net value of investments approved by the OIO so far this year net value spent by US investors net value spent by Hong Kong investors subdivision. CDL Land is 61 per cent foreign owned.
While some activists highlight loss of sovereignty associated with foreign ownership, the investment by French company Andros Group in Barker Fruit Processors has boosted production, exports and profits for the Geraldine-based business.
Newly released figures from the OIO show Andros paid $27m for an 85 per cent stake in the Canterbury business more than two years ago.
Companies Office records show that in 2017 Barker Fruit made sales of $60m compared with $55m the previous year, and its profit more than doubled to $2m.
Barker Fruit chairman Michael Barker, who retained a shareholding along with other Kiwi managers, said the biggest challenge for any local producer was to grow and export.
‘‘You need international connectivity. There are virtually no mediumsized companies in New Zealand because the Tasman Sea upsets the seamless growth that allows companies around the world to access economies of scale,’’ Barker said.
‘‘In New Zealand we have small companies producing several products, unlike Europe where huge factories produce a few lines because they have the population to support sales.’’
Andros makes and markets fruit, jams and preserves in 25 factories around the world and runs a global sales and distribution network.
‘‘When we went looking an international investment partner we were also looking for expertise in marketing and technology as well as capital,’’ Barker said.
Brew Group, the owner of Kiwi brands Bell Tea, Jed’s Coffee, Gravity and Hummingbird Coffee was sold to Dutch company Jacobs Douwe Egberts for $100m.
Tegel paid $15m for New Plymouth poultry processor Kaipi Holdings in October last year.
New Wish Investment, half-owned by Canadian interests and half by Chinese interests, paid $25.5m for 22ha at Gulf Harbour, Whangaparoa, plus the remaining 55 per cent of shares in Westlake Investment formerly owned by Terry Lee and family.