Thursday, April 25, 2024

Farm sales flurry reported by OIO

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Over 14,000ha of farmland has been sold to foreign purchasers for forestry conversion in the past 12 months under the Government’s special forest consent programme.
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Overseas Investment Office (OIO) data from July 1, 2019 to June 30 this year has highlighted a flurry of overseas sales with 8298ha of that farmland being planted in trees. The 14,407ha represents 16 farms purchased for forestry conversion.

OIO manager Michael Appleyard said the busiest month for the office had been last September, when nine sales were consented in four weeks.

Alongside the 16 farm purchases, there were 20 existing forest block purchases made over the same period to foreign buyers, amounting to 47,987ha of land. 

“The difference between the 14,407ha purchased and the 8298ha that has gone into trees could be explained by some of those farms already having some forestry upon them, subdivision, riparian planting or native plantings already on those properties,” Appleyard said.

Areas experiencing the greatest number of purchases are in the lower North Island, with Gisborne’s consented purchase area including three farms, the same number as Hawke’s Bay and Wellington.

Otago also had three farm conversions, Northland two, and Marlborough and Taranaki had one each.

The lower North Island has reported the greatest level of pushback against farm to forestry conversion in recent months.

Concern over levels of conversion prompted the Government to bring forward by a year a review into the screening of foreign forestry investors.

Labour has since pledged in the first six months of the next term of government it would curtail conversion of productive land to forestry by requiring a resource consent. Councils will also be given more say on what land can and cannot be sold and used for forestry.

The move has been welcomed by opponents to forestry, including 50 Shades of Green.

Since the lockdown period, Appleyard said the office has reported “steady” interest from foreign investors, at a rate of one to two a month.

This was confirmed by Forest Owners Association president Phil Taylor who said prior to covid-19’s global impact there had been strong interest from both foreign and local investors in forest areas.

The OIO data indicated United Kingdom investors account for the lion’s share of investor interest, with 10 applicants from there, followed by Austria, Germany and Switzerland all accounting for six investors apiece.

Typically those investors were high net worth individuals drawn by the clearer rules around foreign ownership and forestry opportunity.

“We have had a few individuals under the special consent process who have had two to three applications over the course of a year,” he said.

In its latest newsletter the OIO has acknowledged land purchases are a hot topic, but that often farming and forestry are combined activities in the purchase arrangements.

Appleyard said the OIO has been at pains to emphasise the sale of land for forestry is only for trees that are to be harvested, not for long term carbon forest plantings.

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