Prices for gold kiwifruit orchards hit new record levels
A series of gold kiwifruit orchards sold at new benchmark prices recently.
At the start of the season, with fruit still not set let alone ready to harvest, Bay of Plenty orchards were selling at higher prices than they did at the end of last season, when purchasers were essentially buying a ready-to-harvest crop as well as the orchard, says a marketer of horticulture property.
Stan Robb of PGG Wrightson Real Estate, Te Puke says recent sales effectively represented a $150,000 per canopy hectare leap in the price of premium gold G3 kiwifruit land in the past three months.
“In the past few days [mid October] we have sold four Paengaroa properties, ranging from 3.54 to 6.78 hectares, at between $1.05 million and $1.076 million per canopy hectare. Two substantially larger properties are set to change hands imminently at similar prices, at or around the same $1 million per canopy hectare mark.
“Recent sales effectively represented a $150,000 per canopy hectare leap in the price of premium gold G3 kiwifruit land in the past three months.”
Stan Robb, PGG Wrightson Real Estate, Te Puke
“Although the first kiwifruit orchard sale of that level took place late last season, that sale was with the crop still on the vine, whereas this season’s fruit is months from setting, with plenty of work required in the meantime. Buyers at the end of last season were buying fruit that they could then sell almost straight away, at around $150,000 per hectare. That is not the case now, meaning these sales actually represent a $150,000 increase in the price of the orchards since June,” he said.
According to Stan Robb, demand for these properties is such that they are on the market for days only.
“Since growers came to grips with Psa in 2013, kiwifruit orchard prices have been on an upward trajectory that has shown no sign of abating. During the Psa crisis, which started in November 2010, values dropped significantly and it was virtually impossible to sell an orchard. By October 2014, growers had turned that around, confidence returned to the sector and a good gold orchard was worth $400,000 per canopy hectare. Then the $500,000 mark was broached at the end of that season.
“Despite expectations that such rises must eventually peak, values have doubled over the past two years.
“Orchardists buying these properties can earn between 10% and 15% return on investment per annum, and with licences to grow the gold variety restricted, the amounts paid for these properties do have a rational basis.”