Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – June 2019 Decisions

New Forests Expands Forestry In Wairarapa And In Marlborough

New Forests Funds are currently snapping up our forests under various regional “Estate” names. As well as two blocks this month, see February, September and October 2016, May, June and September 2018, May 2019 and next month, July 2019. Norsewood Estate Ltd has consent to acquire 373.2 hectares at 139 Clay Creek Road, Ruakokoputuna, South Wairarapa, from Apiary Land Holdings Ltd (Peter Thomas Puddick, NZ 50% and Robert Stanley Moor Family Trust, NZ 50%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.

Norsewood Estate Ltd is owned by ANZFF3 Ltd which is wholly owned by ANZFOF3 NZ Pty Ltd which is ultimately owned by The Trust Company (Australia) Ltd as trustee for the New Forests Australia New Zealand Forestry Operating Fund 3 which is wholly owned by certain overseas investment funds. The New Forests Australia New Zealand Forestry Operating Fund 3 is managed by New Forests Asset Management Pty Limited

The OIO states that Norsewood Estate is acquiring the land to convert to forestry. Norsewood Estate Ltd is managed by New Forests Asset Management Pty Ltd, an Australian investment fund that specialises in investing in forestry assets. The acquisition is expected to result in substantial and identifiable benefit to New Zealand including the creation of jobs, investment in development and advancement of the One Billion Trees Programme.

In addition, it is stated that it is likely to result in mechanisms to protect and enhance significant areas of indigenous vegetation including a conservation covenant and pest control. Google Maps shows this property to be farmland adjacent to an area of harvested forest land, which appears to be New Forests’ Clay Creek Rd property consented in February 2016

Marberry Estate Ltd has consent to acquire approximately 1,358.5 hectares at Kaiuma Bay, Pelorus Sound, Marlborough. Marberry Estate is owned by ANZFF3 Ltd which is wholly owned by ANZFOF3 NZ Pty Ltd which is ultimately owned by The Trust Company (Australia) Ltd as trustee for the New Forests Australia NZ Forestry Operating Fund 3 which is wholly owned by certain overseas investment funds. The New Forests Australia NZ Forestry Operating Fund 3 is managed by New Forests Asset Management Pty Ltd. The vendor is Greenfields Forestry Ltd (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.

The OIO states that Marberry Estate has applied under the special test for forestry activities in s.16A(4) of the Act. Marberry Estate is managed by New Forests Asset Management Pty Limited, an Australian investment fund that specialises in investing in forestry assets. Approximately half the land is in mature commercial forestry, with the rest mostly native vegetation. Upon harvest of the existing crop, Marberry Estate intends to replant with a commercial crop. The native vegetation will not be harvested. See also May and June 2018, and February, September and October 2016 for other New Forests acquisitions.

Craigmore Buys Land For Forestry In Northland For Swiss Backers

Kauri Forestry LP (Switzerland 93%; Germany 7%) has consent to acquire approximately 1,876 hectares at Lucas Road and Pokapu Road, Moerewa, Northland, known as Moerewa Station, from Moerewa Station Ltd as trustee of the Moerewa Station Trust (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.

The OIO states that Kauri Forestry has applied under the special test for forestry activities in s.16A(4) of the Act. The land is currently predominantly used for dry stock farming, but includes 251 hectares of forest. Kauri Forestry will subdivide and sell two areas of flat farm land with dwellings not required for forestry activities (275 ha.), and plant and maintain a commercial forest of radiata pine over the remaining 1,175 ha. Most of a new forest will be planted in winter from May 2020 and May 2021, although some planting will occur in 2019. The expected rotation time for the trees is between 25 to 30 years.

Kauri Forestry Opco Ltd was registered in NZ in June 2018 with one NZ director and no ultimate owner. However, Craigmore’s Website reveals that Kauri Forestry LP is “a forestry business built, managed and governed by Craigmore Sustainables”, which has also bought Lagoon Hills Station in the Wairarapa – see commentary of August 2019.

Property News reveals that the vendor of this Northland farm was a member of the wealthy Spencer family, while Lagoon Hills Station was sold by Sir Michael Fay, who made his fortune in the 1980s and 90s during privatisation of State enterprises TranzRail, Telecom and Bank of New Zealand.

Japanese Pan Pac Buys Tiropai Forest In Hawkes Bay

Pan Pac Forest Products Ltd (Japanese Public 74.6%; US Public 11.7%; UK Public 6.4%; various overseas 6.1%; Belgium Public 1.3%) has consent to acquire approximately 272 hectares at Dartmoor Road, Dartmoor, Hawkes Bay, from Taypier Forestry Ltd (NZ 100%) for $660,000. The OIO stats that Pan Pac has applied under the special test for forestry activities in s.16A(4) of the Act. Tiropai Forest is a mature forest of mostly pinus radiata. Pan Pac intends to harvest the existing crop and replant mostly in pinus radiata. It is purchasing Tiropai Forest primarily to secure timber supply for its domestic lumber and pulp business, and intends to hold the land indefinitely

See October 2018 for Pan Pac’s acquisition of Taypier Forest No.2. Pan Pac’s Website describes it as “New Zealand’s industry leading specialists in sustainable radiata pine products” exporting for over 45 years. Its registered ultimately owner is Oji Green Resources Co. Ltd, Tokyo. In 2012 Oji Holdings Corporation was the third largest company in the global forest, paper and packaging industry, with revenue of $US13.2 billion in FY 2012.

It is listed on the Tokyo Stock Exchange and part of Nikkei 225 stock index. See Oji Oceania Management (NZ) Ltd’s consent to purchase 3,000 ha of forests from Carter Holt Harvey in November 2014, and Pan Pac’s consents to buy forestry land in December 2014, April 2011, January 2006, February and August 2005, November 2004, July and August 2001.

Nippon Paint Buys Dulux

Nippon Paint Holdings Co. Ltd (Japanese Public 41.4%; Hong Kong Public 39.1%; UK Public 8.7%; French Public 4.2%; US Public 2.8%; Singapore Public 2.3%; various overseas 1.5%) has consent to acquire 100% of the shares in DuluxGroup Ltd from existing shareholders (Australian Public 98%; various overseas 2%). Market value is unquantified; the consolidated book value of the total assets in NZ was approximately $261,809,000 as at 30/9/18.

The OIO states that Nippon Paint is a Japanese company that develops, manufactures, and sells paint, coating/treatment products, and fine chemical products. DuluxGroup Ltd manufactures, sells and distributes paint, adhesive and building products. DuluxGroup is the parent company of a number of NZ entities and is a well-known paint business. Nippon Paint does not currently intend to operate the DuluxGroup business any differently from its existing business operations. It has satisfied the OIO that the individuals who will control the investment have the relevant business experience and acumen and are of good character, and has demonstrated financial commitment to the investment.

The brand name Dulux has been used by DuPont and ICI since 1931; it was one of the first alkyd-based paints. Sydney paint company BALM (established 1918) got the technology and the Dulux trade mark in 1933. In 1986 it was bought by ICI, added British Paints, Selleys and Berger and in 1998 changed its name to Orico. In 2010 it demerged, listing DuluxGroup as an independent company on the ASX.

Nine.com.au (1/8/19) reported that Nippon paid $A3.8 billion for DuluxGroup at $A9.37 a share. Nippon, with operations in Asia, Europe and the US, generated about $7.8 billion in sales in the year to December 2018.

Australian Joval Wines Buys Otago Vineyard

Joval Wine Group (NZ) Ltd (John Fulvio Valmorbida and family, Australia 100%) has consent to acquire approximately 20 hectares at 68 Queensberry Terrace, Queensberry, Otago, from Avalon Estate Ltd New Zealand (100%) for $5,090,250. The OIO states that Joval Wine Group is purchasing this vineyard in Central Otago to grow grapes for its award-winning Nanny Goat premium wine brand.

Joval Wine Group believes that with its strong beverage distribution network in Australia, which sold approximately 9.1% of all Australian on-premises wines in 2018, it can make its label Nanny Goat a well-known premium brand in Australia and overseas. Opening up the Australian market to Central Otago wines is likely to benefit the New Zealand wine industry generally.

Joval Wines has the ability through its distribution channels to place its products at the premium end of the market. It also has the potential to raise the profile of the Otago region through promoting its award-winning Nanny Goat brand. It plans to plant additional vines, expand the winery and create a barrel room to increase capacity as well as employing additional staff.

The Joval Wine Group (NZ) is owned by a Trust and is part of the Australian privately owned Joval Family Wines. As well as the vineyard which includes 10.8 ha of BioGro Certified Organic Pinot Noir, Chardonnay, Pinot Gris and Riesling, the purchase includes the premium Central Otago wine brand Archangel (Yvonne Lorkin, 14/6/19).

US/Australian Winemakers Buy Escarpment Vineyard

Escarpment Vineyard Ltd (USA 100%) has consent to acquire approximately 25 hectares at 275 Te Muna Road, Martinborough, from Escarpment Vineyard Martinborough Ltd (Australia 71.9%; NZ 28.1%) for $1.7 million. The OIO states the Escarpment Vineyard is wholly owned by Presali Australia Holdings Pty Ltd. Presali also owns Torbreck Vintners Pty Ltd, an Australian grape grower, winemaker and wine distributor with an international reputation for premium wines. The land includes an existing vineyard and winery.

Escarpment Vineyard Ltd intends to undertake a replanting program to re-graft approximately three hectares of low-revenue Pinot Gris and Riesling vines with high-value Pinot Noir and Chardonnay vines to produce greater amounts of higher-value wine for export. A small amount of additional Pinot Noir and Chardonnay vines will also be planted.

The applicant intends to redevelop the winery to increase its capacity, upgrade plant and machinery, and develop a tasting facility and a separate cellar door to improve visitor experience. Torbreck’s sales and marketing system will promote and sell Escarpment wines and increase export sales of its Pinot Noir and Chardonnay in the international wine market. Four jobs are likely to be created, being two viticulture cadetships, a marketing manager and a cellar door salesperson.

Escarpment Vineyard was established in 1998 and purchased in March 2018 by Torbreck, a winemaking company that has accumulated several high-quality Barossa Valley vineyards. Escarpment Vineyard and also Escarpment Holdings were registered in February 2018 with Presali as ultimate owner, and Escarpment Holdings owns Escarpment Winery, registered in April 2019. Escarpment Vineyard Marlborough’s name was changed on 2 July 2019 to TEVM Ltd, so maybe Presali bought the name and the vineyard but not the company

I can find no information on Presali other than company registration in South Australia. Torbreck Vintners, founded by David Powell in 1994, went into receivership in 2002, was sold with Powell as vintner, then back by him in partnership with Peter Kight of Quivira Winery, California, who forced Powell out in 2013. Hence the USA-Australia ownerships; a small example of wine industry globalisation.

Graymont Expands Lime Quarrying In Te Kuiti (And Globally)

Graymont (NZ) Ltd (Canada 98.8%; USA 1%; UK 0.2%) has consent to acquire 197.5 hectares at Oparure Road, Te Kuiti, from Paul Ashton Grainger, Claire Margaret Grainger and Graeme William Elvin as trustees of Grainger Family Trust (NZ 100%) for $5 million. The OIO states that Graymont’s parent company is based in Canada and is a large worldwide producer of lime and limestone products.

Graymont currently operates four lime and limestone-based facilities in New Zealand. The land is adjacent to Graymont’s Oparure Quarry in Te Kuiti, and is required to extend the viability of these existing limestone quarry operations. The land contains chemical grade limestone that is accessible near the surface (i.e. reducing the cost and environmental impact of removing large amounts of overburden). The limestone is intended for processing into quicklime at Graymont’s plants in Otorohanga and Te Kuiti.

The land will extend the viability of Graymont’s business for 20+ years, continue to supply NZ businesses in the long-term, increase exports, and create more certainty for Graymont’s NZ employees. The land is currently used to graze sheep and cattle. Graymont’s arrangements with the vendors provide for them to continue grazing stock on parts of the land not immediately required. Stated likely benefits for New Zealand include:

enhanced viability of Graymont’s existing operations by extending the quarry’s reserve life by 20+ years
retention of existing jobs, and creation of new jobs due to growing its business;
increased export receipts for limestone products;
increased processing of primary products;
protection for and enhancement of indigenous vegetation and habitats of indigenous fauna, including Graymont establishing Queen Elizabeth II covenants over 6.5 hectares of significant natural area and the entrance to the Guildford Cave;
NZ industries having increased security of supply of limestone products from a domestic source (e.g. for steel production, pulp and paper production, and water treatment); and
previous investments that have been or are of benefit to New Zealand.

Once it is depleted, Graymont plans to return the quarry to farmland with some areas of native planting. Family-owned Graymont describes itself as a global leader in lime and limestone solutions, operating for over 70 years. It partners with Mexican-based Grupo Calidra, the largest lime producer in Latin America, which it has part-owned since 2003. Both are privately held companies. They are currently buying the global lime and limestone business of the Belgium-based Sibelco Group.

The deal involves Graymont getting five Sibelco lime plants and several quarries on the east coast of Australia, as well as lime plants in Malaysia and the Philippines. It is currently seeking regulatory approvals to get Sibelco’s lime operations in Indonesia. Grupo Calidra gets Sibelco’s lime operations in Argentina and Chile. Sibelco is a global leader in specialty industrial minerals, and a majority shareholder in Covia, a New York Stock Exchange-listed provider of minerals and material solutions for industry and energy in North America.

Metlifecare Gets A Rubber Stamp

Metlifecare Ltd (NZ 68.3%; Australia 19.1%; USA 5.8%; UK 3.8%; Norway 1.3%; various 1.8%) has a Standing Consent (Increased Housing test) to acquire 12 residential (but not otherwise sensitive) sites. Vendors and prices not yet determined. The OIO states that Metlifecare is a publicly-listed retirement village operator in NZ that develops retirement villages, being long-term accommodation facilities under Schedule 2 of the Act. The OIO is satisfied Metlifecare has demonstrated that residential land acquired under this standing consent is likely to be used in the construction of, or an increase of the number of dwellings in, a long-term accommodation facility.

This standing consent for a maximum of 12 transactions by 13 June 2022 will permit Metlifecare to acquire up to a total of 120 hectares of residential land located within the territories of Northland Regional Council, Auckland Council, Waikato Regional Council, Bay of Plenty Regional Council, Hawke’s Bay Regional Council, Taranaki Regional Council, Manawatu-Wanganui Regional Council, Wellington Regional Council, Nelson City Council, Marlborough District Council, Canterbury Regional Council, and Otago Regional Council.

Ryman Healthcare Buys Christchurch Land From Ngai Tahu

Ryman Healthcare Ltd (NZ Public 44.5%; US Public 13%; Geoffrey Alexander Cummings, NZ 10.2%;
Kevin James Hickman, NZ 7.2%; Germany Public 6.6%; Australian Public 5%; various public 4.5%; UK Public 2.6%; Canadian Public 2.3%; Switzerland Public 1.1%; Norway Public 1%; Japanese Public 1%;
Hong Kong Public 1%) has consent to acquire 4.98 hectares at Steadman Road, Broomfield, Christchurch, from Ngai Tahu Property Ltd (Te R&umacr;nanga o Ngai Tahu, NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.

The OIO states that Ryman Healthcare has operated retirement villages in New Zealand since 1984 and currently has 31 retirement villages offering a range of care including independent living, assisted living, rest home care, hospital care and dementia care. Ryman intends to develop a comprehensive care retirement village on the land. The benefits to New Zealand include:

Approximately 200 jobs, including 50 skilled jobs;
Greater productive use of the land through a large number of living units for the size of the land;
Oversight and control of, and participation in, the investment by New Zealanders; and
Enhanced domestic services by providing a continuum of care

Ryman Healthcare was a 2009 finalist for the Roger Award For Worst Transnational Corporation Operating In Aotearoa/New Zealand. See March 1998 for past overseas ownership; Rymans is now listed on the NZX, and is one of the largest companies in the NZX 50 Index. For a description of its operation, see our commentary of July 2019 when Ryman’s Healthcare gets its own rubber stamp from the OIO.

Brierley Leases Wynyard Council Land To Expand Oram Shop And Build Housing

Orams Group Ltd (Sir Ron Brierley, NZ 30%; Solomon Lew, Australia 20%; Ariadne Australia Ltd50% being Dr Gary Weiss; Australia 19%; Australian Public 17.5%; Thorney Holdings Pty Ltd, Australia 5.3%; Leigh Vanessa Seymour, Australia 5.3%; Kayaal Pty Ltd, Australia 2.9%) has consent to acquire a leasehold interest in approximately 3.5515 hectares at Beaumont Street, Wynyard Quarter, Auckland for a term of 125 years, from Panuku Development Auckland Ltd (Auckland Council, NZ 100%) for $51,460,000.

The OIO states that Orams and its parent entities are specialists in marine services in NZ and Australia. Orams already holds a lease on part of the property and this will increase its interest and expand the term of the lease. Orams intends to expand the existing marine maintenance and refit facility and further develop part of the land for residential purposes.

Orams intends to enhance domestic services by providing additional marine facilities and specialist marine machinery and by providing New Zealanders with the opportunity to participate in the investment. I guess that last bit means just Sir Ron, since this is a privately owned, largely Australian company. On 2 June 2019, “veteran corporate raider” Brierley retired from his ASX-listed vehicle Mercantile Investments, which is to merge with Sandon Capital Investments.

Brierley’s other corporate raiding vehicles have been Brierley Investments (BIL, 1961-2001, featuring in the 1987 crash) and Guinness Peat Group plc [GPG, 1990-2015], (NZ Herald 7/6/19 and 2/6//11, ). Gary Weiss, who has been selling down his share of ASX-listed investment company Ariadne in 2019, was Brierley’s longstanding colleague in BIL and GPG.

Orams Marine Services Website says it has been building and servicing a wide range of vessels since 1947. In 1987 it brought the first superyacht into NZ for refit & maintenance. Orams Marine Village has more than 30 marine specialist businesses on a 19,274 m2 site on the Auckland waterfront, “handling almost anything marine, but especially superyacht refits, equipment and motor repairs, boat maintenance, boat storage and sales”.

Emirates Buys Into Blackstone Property, Including Wynyard Precinct

Al Sariya Third Commercial Investments RSC Ltd (UAE 100%) has consent to acquire up to 53.1% of Blackstone Property Partners Asia (Lux) SCSp SCSp (Hong Kong SAR 49%; Switzerland 19.2%; Canada 12.5%; UK 7.7%; USA 5.8%; Japan 2.9%; Guatemala 2.9%), the value of the assets of Blackstone and its 25% or more subsidiaries being greater than $100m.

The OIO states that the assets in total are worth approximately $635 million; the value of the NZ assets has not been specified but is more than $100 million. The application relates to the BPPA fund which specialises in real estate investments in the Asia-Pacific region and indirectly owns shares in Wynyard Precinct Holdings Ltd, which indirectly owns commercial properties in Auckland. Al Sariya Third Commercial Investments is being added as a new investor to the Fund.

Al Sariya has satisfied the OIO that the individuals who will control the investment have the relevant business experience and acumen and are of good character, and have demonstrated financial commitment. See December 2018 for Blackstone’s acquisition of Wynyard Precinct Holdings, previously known as Viaduct Corporate Centre Ltd (2006-15) and Balmon Holdings (2001-6).

Auckland International College Expands Boarding Facilities

Academy for the International Community NZ Ltd (Shingo Mitsuda, Japan 59.6%; Daiko Mitsuda, Japan 25.5%; Hosen Mitsuda, Japan 6.5%; OSHU employee stock programme, Japan 4.2%; OSHU individual employee stockholders, Japan 4.2%) has consent to acquire 0.4789 hectares at 65 Swanson Road Henderson, West Auckland, from Bun Ji Kim and Kyung Il Son Son (NZ 100%) for $7,140,000.

The OIO states that the Academy for the International Community is wholly owned by Oshu Corporation Inc.), a company incorporated in Japan. It operates Auckland International College, a private school for New Zealand and international secondary students. AIC is the only New Zealand school where all students study only for the International Baccalaureate Diploma. The Academy intends to convert existing motel accommodation into boarding accommodation, allowing it to continue to provide sufficient accommodation for its international students. Wikipedia describes Oshu Corporation as a company that manages cram schools, based in Hiroshima Prefecture.

Vitaco Leases Warehouse Space In Tamaki

Vitaco Health (NZ) Ltd Ltd (China Public 31.7%; Shanghai Industrial Investment (Holdings) Co. Ltd and Shanghai Shangshi (Group) Co. Ltd, China PR 14.3%; various overseas 29.1%; US Public 12.3%; Cayman Islands Public 5.9%; Hong Kong Public 3.4%; British Virgin Islands Public 3.3%) has consent to acquire a leasehold interest in 1.2512 hectares at 11 Kordel Place, East Tamaki, Auckland, from East Tamaki Investments Ltd (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.

The OIO states that Vitaco Health is a manufacturer of health supplements and specialist food and beverage products with a factory at Kordel Place. It has been operating in New Zealand since 2006. It intends to use the leasehold premises as a warehousing and distribution centre, thereby increasing production space at its existing sites. This will allow Vitaco to increase export receipts and increase the processing of milk, a NZ primary product. Vitaco has undertaken previous investments in the area which are said to benefit New Zealand.

Vitaco is the holding company for Healtheries NZ Ltd and Vitaco Health (NZ) Ltd and their subsidiaries. See consents of March and November 2009 for its acquisition by Australian equity fund New Capital, followed by Chinese Primavera Capital Fund II LP and Shanghai Pharmaceuticals in November 2016.

Warner Bros Buys House For TV Show

Warner Bros International Television Production NZ Ltd (US Public 99.97%; various overseas 0.03%) has consent to acquire approximately 0.1360 hectares of residential (but not otherwise sensitive) land in Auckland, from Katrina Elfreda Williams and Michael John Williams (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.

The OIO states that Warner Bros is a television production company that acquires residential land for the purpose of producing a television show. This consent has been granted in accordance with the non-residential use test set out in Schedule 2 of the Act. The consent permits Warner Bros to acquire a freehold interest in two titles for the purpose of television production. The land will be divested once the television production and related activities have concluded.

New Zealand Lifestyles

Jiyun Qiu, a Chinese citizen now residing in New Zealand (100%), has consent to acquire approximately 10.8042 hectares at 131 Rogers Road, Pukekohe, Auckland, from Chunxian Liu , a NZ permanent resident (100%) for $1,690,000. The OIO states that overseas persons intending to reside in New Zealand indefinitely are not required to show that their investment in sensitive land is likely to benefit New Zealand. This supports migrants in the process of moving to New Zealand to make New Zealand their home.

To quote the OIO: “This is a retrospective consent. Mr Jiyun Qiu acquired the land from Ms Liu in 2017. At the time of the acquisition, his then-legal advisor did not inform him of the requirements of the Overseas Investment Act 2005. Once he became aware of the Act, Mr Qiu self-reported his acquisition of land and has since cooperated fully with the Overseas Investment Office. We are of the view that given the self-reporting, willingness to comply with the Act, and the fact that he has ceased to be an overseas person, it is appropriate to grant retrospective consent to this acquisition. Mr Qiu has satisfied us that he intends to ordinarily reside indefinitely in New Zealand”.

Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258
Christchurch.