Friday, April 19, 2024

Foreign forestry buyers snapped up 450,000 ha before regs changed

Neal Wallace
Trend appears to be reversing since rules were tightened.
The NZ rural Land Co also revealed on Friday that earnings expectations for the 2024 financial year have been upgraded, helped by the recent acquisition of two forestry properties.
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Nearly 450,000ha was sold to foreign buyers in the five years that such transactions were permitted under the government’s Special Forestry Test category.

Rebecca McAtamney, Land Information NZ (LINZ) head of regulatory practice and delivery, said an additional 6289ha was acquired through 17 transactions under a standing consent.

This means a total of 447,404ha was purchased through 179 consents between 2018 and 2023.

Of those, 99 were for farm conversions covering 80,404ha and 80 were of existing forestry, covering 367,000ha.

The Special Forestry Test threshold has since been increased and all applications are now considered under the higher Benefit to NZ threshold.

The districts hardest hit by sales of farmland to foreign forestry companies under the Special Forestry Test were: Central Hawke’s Bay, with 10 sales covering 5500ha; Clutha, five at 6800ha; Gisborne, 10 at 14,000ha; Hastings, five at 2300ha; Masterton, eight at 6300ha; South Wairarapa, five at 7900ha; Southland, seven at 2800ha; Wairoa, five at 4200ha; and Whangārei, six at 2500ha.

LINZ reports that 18 applications have been lodged under the Benefit to NZ test for farm to forest conversions, with the first three decisions made.

One was granted and two declined.

The approved application was to United Kingdom-based Enterprise Investments WRI Ltd to buy 237ha of pastoral land in the Bay of Plenty, its second such purchase.

Predominantly Class 6 and 7 land, the farm has been used to graze cattle and the purchaser intends planting 180ha in pinus radiata.

The decision states NZ will benefit through increased job opportunities and revenue from the land, more domestic processing of primary products, ecological benefits, enhancement of an historic feature on the land, advancing significant government policy and potentially increased public access. 

Two other applications were rejected, those of Port Blakely Ltd and Corisol NZ Ltd.

United States-based Port Blakely has invested in NZ for 30 years, but its request to buy an 800ha Otago sheep and beef farm was declined despite claiming benefits of job opportunities, increased revenue and timber for domestic processing.

Consent was declined as ministers were ultimately not satisfied that the likely benefit was proportionate to the sensitivity of the land and the nature of the overseas investment. 

Swiss-based Corisol NZ Ltd sought to buy a second Otago farm, intending to plant trees on 473ha of the 600ha property.

It claimed benefits to NZ from meeting its climate change obligations, increased job opportunities and export receipts, advancing government policy, increased biodiversity and increased public access. 

It was declined on the same basis as the Port Blakely application.

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