Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – July 2010 Decisions

AMP Property Trust Restructures

The most significant OIO decision in the month of July was the restructure of the AMP NZ Office Property Trust and involved three separate OIO approvals. Firstly AMP Capital Investors (New Zealand) Limited AMP Capital Holdings Limited, Australia (100%) was given approval for “an overseas investment in significant business assets, being the acquisition of property in New Zealand used in carrying on business in New Zealand for consideration exceeding $100m, being the Applicant, together with its associates, having a 25% or more ownership or control interest in AMP NZ Office Trust’s new corporate entity AMP NZ Office Limited following the corporatisation and restructuring of the AMP NZ Office Trust”. The asset value was stated as $1,334,000,000. The vendors were Existing Unitholders of AMP NZ Office Trust AMP NZ Office Trust, New Zealand (100%)

The OIO states: “AMP NZ Office Trust (APT) is a listed unit trust managed by AMP Haumi Management Limited (AHML). The trustee of APT is Perpetual Trust Limited. APT’s units are widely held by over 8,000 investors. APT is New Zealand’s largest listed investor in commercial office property with a portfolio comprising 15 predominantly prime and A-grade office buildings. APT is proposing a new corporate structure and governance model which involves the conversion of APT to a company structure and the entry into a new management agreement between AMP NZ Office Limited and AHML”.

Secondly, AMP Haumi Management Limited Abu Dhabi Investment Authority (50%), AMP Capital Holdings Limited, Australia (50%) was given approval for the same investment, vendor, asset value and OIO background as described above. Thirdly, Haumi Development Auckland Limited as General Partner of the Haumi Development Limited Partnership and Haumi Company Limited as General Partner of the Haumi (NZ) Limited Partnership Abu Dhabi Investment Authority (100%) was given approval for the same investment, vendor and asset value as described in the first approval above.

The OIO states for this approval: “AMP NZ Office Trust (APT) is a listed unit trust managed by AMP Haumi Management Limited (AHML). The trustee of APT is Perpetual Trust Limited. APT’s units are widely held by over 8,000 investors. Haumi Company Limited as General Partner of the Haumi (NZ) Limited Partnership owns approximately 19.9% of the units in APT.

AHML is a joint venture company between AMP Capital Investors (New Zealand) Limited (AMPCI) and Haumi Development Auckland Limited as General Partner of Haumi Development Limited Partnership (HDLP). Each holds 50% of the ordinary shares of AHML. APT is proposing a new corporate structure and governance model which involves the conversion of APT to a company structure and the entry into a new management agreement between AMP NZ Office Limited and AHML”.

Confused? Me too. In researching the background to this Decision I came across the following commentary written by Bob Dey in his property report on 25 January 2008: “AMP Capital Investors (NZ) Ltd has changed partners in the management of the AMP NZ Office Trust and will reduce its holding of units in the trust. AMP confirmed on Wednesday that its deal with Haumi Co Ltd, a subsidiary of the Abu Dhabi Investment Authority, would proceed (conditional on regulatory approval), replacing Multiplex Ltd as 50% owner of AMP Multiplex Management Ltd.

“AMP was able to buy Multiplex out of its half of the management company and acquire its 14.8% stake in the trust under a deed of arrangement after Brookfield Asset Management of Toronto bought the Australian property company at the end of last year. AMP said yesterday a new specific rights deed would enable it to acquire all the units in the trust held by Haumi, with similar pre-emptive & ‘tag-along’ rights applying to the management company stake. Haumi won’t be able to sell out for three years. Haumi will end up with 19.9% of the Trust on settlement of the transaction, although the combined stakes of the Multiplex units plus the units held by various AMP Capital Investors-managed funds totalled 27.3% this week. Haumi will end up with 5% of those AMP interests and AMP Capital Investors will reduce its holdings to 5%, although AMP Capital Investors Managing Director Murray Gribben said it would seek clearance to have the flexibility to go beyond that level.

“The Abu Dhabi authority said last week if the agreement went ahead it would buy 19.9% of the trust for $178 million at $1.30 a unit. The units had slipped to $1.14 when the parties confirmed on Wednesday the agreement would proceed, but the transaction price was unchanged. Mr Gribben said the Abu Dhabi authority was a major international institutional investor with extensive experience in global real estate. The Trust has a $1.4 billion portfolio of prime commercial office assets providing net tangible asset backing of $1.49 a unit at the June 2007 balance date, $1.63 according to NZX this week. Market capitalisation was just over $900 million at balance date ($784 million this week) for a trust which had very low gearing, at 22% debt to total assets”.

Well that clarifies things, NOT! While the OIO and AMP NZ Office Ltd describe its portfolio as “15 predominantly prime and A-grade office buildings, at least one property, the former Lion Breweries site in Khyber Pass Road, Newmarket, Auckland has failed miserably as an investment for AMP. As reported in the National Business Review (4/6/10), this site has proved to be a dilemma for AMP: “AMP Capital Investors is reviewing all aspects of its Lion Breweries Newmarket project as industry participants wonder if even an investor of its stature can pull off a $1 billion development on prime land in Auckland in this market.

“The sale of the 5.2ha site on Khyber Pass Road for $162 million was agreed in 2007 before the global financial crisis crunched credit and investors’ appetite for risk, and only a $50 million deposit has been paid. Vendor Lion Nathan has been building a new brewery on Ormiston Road in South Auckland and is expected to leave the historic Newmarket site this year. AMP Capital Investors plans to build apartments, offices, shops and a high rise retirement village in what is believed to be the biggest property development in New Zealand. The site is about ten minutes from Auckland’s central business district, next to the Auckland Domain, and in the Auckland Grammar School zone. But development plans are delayed and Cameron Brewer, chief executive of the Newmarket Business Association, is ‘increasingly concerned that this huge site could be abandoned for years’.

“The 2008 Annual Report of Great Northern Developments, the company formed to acquire and develop the site, reveals Lion has a right of occupancy for three years from the date of sale on September 26, 2007 and a vendor mortgage of $122 million is due on September 26, 2010. Great Northern, which takes its name from a former brewery on the site, in 2008 became a joint venture between AMP Private Equity Real Estate Fund II, a fund managed by AMP Capital Investors, and Haumi Developments Ltd Partnership. Haumi – the Maori word for joining or partnership – is owned by the Abu Dhabi Investment Authority (ADIA), which has been coy about its expanding portfolio in New Zealand.

“A separate ADIA-owned Haumi company owns 19.9% of AMP Office Trust, the largest listed office building owner in New Zealand, and 50% of that Trust’s manager. ADIA invests oil wealth from the United Arab Emirates and is reported to be the world’s second biggest institutional investor. AMP Capital Investors Managing Director Graham Law told NZPA that the strategy from the outset was to attract new investment. While Haumi was secured as a co-investor in late 2008 no further new investment had been secured since. ‘We continue to focus on securing further investment in this iconic development’, he said.

“ADIA’s investment in Great Northern was unrelated to its investment in ANZ Office Trust and ANZ Office Trust had no exposure to Great Northern, he said. He said Lion Nathan was required to give notice six months before vacating the site and notice had not been given. ‘We do not currently have a fixed date for the repayment of the vendor loan’, he said. Lion confirmed it had not given notice and that discharge of the mortgage would not occur until it vacated the site. ‘Our current best estimate is toward the end of the year but there is some flexibility in the time line depending on circumstances’, Neil Hinton, Lion’s Corporate Affairs Director said.

“Mr Law said the time line for the project had been delayed due to the prolonged effects of the global financial crisis. ‘We’re reviewing all aspects of the project’, he said. AMP was working carefully through all options for progressing the site. Mr Law declined to comment on the impact of a likely revaluation of Great Northern’s assets, given the still poorly performing development property market. The 2008 accounts have an event after balance date note that the property market ‘may have declined’. He said it was a matter for directors when they approved the 2009 financial accounts. These accounts do not have to be filed to the Companies Office and they will not be filed.

“AMP Office Trust cut the value of its portfolio of prime office buildings by 7.6% in a year. Great Northern had total assets of $179 million in 2008. The company has a cash advance facility with BNZ due for repayment on September 26, 2013. The accounts note that the company is reliant on the continued financial support of its bank given the nature of its business and that the bank had given no indication that it would not extend funding. ADIA is believed to have assets of between $US500-700 billion and recently underwent a management change when Sheikh Hamed Bin Zayed Al Nahyan took over as managing director after his brother Ahmed died in a glider crash in Morocco in March (2010).

“ADIA said in the Overseas Investment Office application to invest in Great Northern in 2008 that it wanted to participate in real estate development to create a diversified property portfolio. That application had an asset value of $172.8 million. ADIA declined to comment for this story. AMP Capital Investors needs to have the site rezoned for mixed use, and its application to Auckland City Council is taking longer than expected. ‘When the ADIA was cleared to buy the half stake 15 months ago, we hoped it would provide a shot in the arm that this site needed’, Mr Brewer said.

“‘However, alarmingly, just a few months out from Lion Nathan pouring the last pint, there are still no concrete plans for what is one of the country’s largest development sites’, he said. Newmarket could be left with an abandoned site surrounded by graffiti-clad hoardings. ‘We appreciate that there’s been a recession and that AMP was forced to sell half of its investment to Abu Dhabi. However, we fear that the first sod being turned is still years away’, Mr Brewer said…”.

The fate of this site was confirmed a couple of months later, with former owner Lion Nathan the big winner and AMP investors the big loser. As reported by Greg Ninness in www.stuff.co.nz (10/10/10): “Up to $30 million may have been paid to Lion Nathan as part of a deal that saw it take back its sprawling Auckland brewery site, adding to losses faced by investors in various AMP funds. AMP purchased the property as a speculative punt that proved disastrous. AMP Capital Investors Managing Director Graham Law would not say exactly how much was written off but said the loss in capital value ranged from 0.3% for AMP’s Kiwisaver default fund to 1% for its Growth fund.

“Law said the site was purchased with the intention of developing 20 to 30 buildings, to be sold off as each was completed. Funding was to come from the public, through AMP’s funds, new equity partners and bank funding. AMP began discussions with Lion about unwinding the acquisition when it became clear it couldn’t secure the funding, he said. Lion sold the site to AMP for $162m in 2007, receiving a $50m deposit and leaving in the balance as a vendor finance, which was due to be repaid last month. Saudi-based Haumi Development LP subsequently took a 50% stake in the property through a joint venture arrangement with AMP.

‘We entered into the arrangement with Lion to minimise the impact on our investors and the key message for me is that there is no further impact on our investors. At all times we’ve acted in the best interest of our investors’, Law said.

“As well as the loss of its $50 million deposit and any further money paid to Lion, the joint venture was capitalising interest costs and would have incurred preliminary development expenses, such as consent costs. That means the amount written off by the joint venture could be more than $90m, with a 50% share sheeted back to investors in AMP managed funds. Property market sources say Lion would have driven a hard bargain before agreeing to take back the property, because the site’s value has fallen sharply and the state of the market means Lion is taking on significant risk. Lion will probably put the property back on the market in the New Year.

“Although the 5.2ha site’s size and location, between Newmarket and the Domain, make it attractive, there would be few developers with the capital required to redevelop it. After all, if AMP couldn’t raise the finance, other developers may find it just as difficult… If Lion received an additional $30m on top of the $50m deposit, it would have ended up back where it started before it sold the property, but with another $80m in its back pocket. Neither AMP nor Lion would comment on the deal…”

I am not surprised AMP does not want to comment on the deal. Perhaps the complicated restructure detailed at the start of this commentary is their way of putting this sorry saga behind them! See our commentary for September 2007 and February 2008 for further details of AMP’s acquisition of the Lion Nathan property. The original formation of AMP NZ Office Trust is covered in our commentary of October 1997. See our commentaries of December 2003 and May 2004 for further OIO approvals involving AMP NZ Office Trust.

Ownership Of Hirequip Also Restructured

In another restructure of an already largely Australian owned Kiwi business, Tasman Capital Partners Pty Limited on behalf of New Trust Australian Public (88.4%), New Zealand Public (11.6%) received approval for the acquisition of rights or interests in 100% of the shares of Pacific Equipment Solutions Limited, the value of the assets of Pacific Equipment Solutions Limited and its 25% or more subsidiaries being greater than $100m. The vendors were existing shareholders of Pacific Equipment Solutions Limited (PESL) Tasman Secondary Trust, Australia (88.4%), New Zealand Public (11.6%). The asset value was stated as $172,217,299.

The OIO states: “PESL owns and operates the Hirequip group, including Hirequip Limited, which is the largest full service equipment hire company in New Zealand. The Investment simplifies the Hirequip group’s corporate structure”. What the simplification is, I am not sure? It appears there is no change in the actual shareholding of Hirequip, just a change in the name of the holding entity concerned. Nikko Principal Investments Limited originally bought Hirequip in 2006 for $167m (see our December 2006 commentary). In February 2008, Nikko (and therefore Hirequip) was acquired by Citigroup, who then on-sold Hirequip to Tasman Secondary Trust in September 2008 for $185m (see our commentaries for each of those months). Tasman then bought the remaining 14% held by Hirequip management in April 2009.

Private Equity Groups Have Pathological Interest In Healthscope

Kohlberg Kravis Roberts & Co. LP (KKR), funds advised by the same, and the Oman Investment Fund, on behalf of an Australian company to be incorporated various overseas persons (30.3%), United States Public (25.3%), Oman Investment Fund, Oman (25%), Luxembourg Public (4%), Canadian Public (3.9%), United Kingdom Public (3%), Japanese Public (1.9%), United Arab Emirates Public (1.7%), Singapore Public (1.1%), Swiss Public (1.1%), South Korean Public (1%), Kuwait Public (0.8%), Hong Kong Public (0.7%), Australian Public (0.3%) has received approval for the acquisition of rights or interests in 100% of the issued share capital of Healthscope New Zealand Limited, the value of the assets of Healthscope New Zealand Limited and its 25% or more subsidiaries being greater than $100m. The vendors were Existing Shareholders of Healthscope New Zealand Limited Various overseas persons (45.3%), National Nominees Limited, Australia (17%), JP Morgan Nominees Australia Limited, Australia (12.5%), HSBC Custody Nominees (Australia) Limited, Australia (10.3%), Cogent Nominees Pty Limited, Australia (3.6%), Citigroup Nominees Pty Limited, Australia (3.6%), ANZ Nominees Limited, Australia (3.1%), Tasman Asset Management, Australia (2.6%), RBC Dexia Investor Services Australia Nominees Pty Limited, Australia (2.2%). Asset value stated was $101,168,378.

The OIO states: “The Applicant proposes to acquire Healthscope Limited (Healthscope), a private health care provider which owns and manages several hospitals in Australia and also operates a pathology business with facilities in Australia, New Zealand and Asia. Healthscope New Zealand Limited, a subsidiary of Healthscope, provides community pathology services for various District Health Boards around the country. The investors in the Applicant believe that Healthscope has strong growth potential, and fits well with their management expertise and their other investments in the healthcare sector abroad”.

As my predecessor, Bill Rosenberg, reported in our commentary of August 2007, KKR is one of the largest private equity corporations in the world which also owns a number of the largest circulation magazines sold in New Zealand through joint ventures with the Australian Seven Network. KKR’s business is buying companies and selling them quickly at a profit. Henry Kravis, chief executive of KKR described it as follows: “To understand KKR, I always like to say, ‘don’t congratulate us when we buy a company’. Any fool can buy a company. Congratulate us when we sell it and when we’ve done something to it, and created real value”. The concern is who the value is created for, and what is the “something done” to achieve it (Press, “KKR to go public as debt costs rise, taxes set to grow”, Robert Guy, 6/7/07, p.B8. For more information on KKR and the news media see the paper “News Media Ownership In New Zealand”, by Bill Rosenberg which is up to date as of September 2008). Despite the above OIO approval, it appears KKR was trumped by another giant private equity fund, Carlyle Group and TPG Capital. As you will see in the August commentary to follow, OIO approval was received by Carlyle for the purchase of Healthscope, and Carlyle was ultimately successful in acquiring Healthscope.

A Confidential Overseas Share Shuffle

A “confidential” investor United States Public (56.4%), various overseas persons (18.5%) Australian Public (18.5%), United Kingdom Public (6.6%) has received approval for a confidential investment. The vendors were also stated as confidential United States Public (52.6%), various overseas persons (18.2%), Australian Public (17.2%), United Kingdom Public (11.9%). Consideration was to be advised. The OIO states with regard to this confidential approval: “The overseas investment transaction has satisfied the criteria in section 16 of the Overseas Investment Act 2005. The ‘benefit to New Zealand’ criterion was satisfied by particular reference to the following factors:

Overseas Investment Act 2005

17(2)(a)(i) – Creation/Retention of jobs
17(2)(a)(ii) – New technology or business skills

Overseas Investment Regulations 2005

28(b) – Key person in a key industry
28(c) – Affect image, trade or international relations”.

Another Overseas Share Shuffle, This Time It’s Supermarket Properties

Antipodean Supermarkets Limited The William Pears Group of Companies Limited, United Kingdom (except Isle of Man and the Channel Islands) [75%], Jonathan Berman, United Kingdom (except Isle of Man and the Channel Islands) [25%] has received approval for an overseas investment in sensitive land, being:

a freehold interest in 1.14 hectares of land at Meadowbank Shopping Centre, Corner Gerard Way and St Johns Rd, Auckland; and
a freehold interest in 1.23 hectares of land at 16/24 Anzac Road, Browns Bay, Auckland; and
a freehold interest in 1.42 hectares of land at 2-10 and 12-16 Barrys Point Road, Takapuna, Auckland; and
a freehold interest in 1.19 hectares of land at 9 Browne Street, Timaru.

The vendor was Perpetual Limited as custodian for the Charter Hall Real Estate Investment Trust Australia (100%). Consideration was stated as confidential. The OIO states: “The Applicant owns a property portfolio comprising an undivided half share in various supermarket properties (the Portfolio) (refer 200620142). The Applicant proposes to acquire the remaining half share in four of the supermarket properties contained within the Portfolio”. Greg Ninness in the Sunday Star Times 5/9/10, comments on this deal:

“One of the biggest property investment companies in the UK is to spend $100 million to double the size of its property investments in this country. William Pears Group, a privately owned, London-based company with more than $2 billion of property assets, already owns a half share of 17 supermarkets, which it acquired from its joint venture partner, ASX-listed Charter Hall Retail Trust, for $103.5m in 2007. Charter Hall now intends to sell its remaining half share of the 17 properties to William Pears Group for about $100m. Charter Hall Retail Trust Chief Executive Steven Sewell said there was no debt on its 50% share of the portfolio and the $100m raised would be invested into properties in Australia, ending the Trust’s foray into the New Zealand market. ‘We think it’s the right time in the cycle to bring that equity back and invest in Australia’, he said.

“But the initial approach about the sale had come from William Pears. The 17 supermarkets involved are spread throughout the country from Auckland to Invercargill and are all leased to Progressive Enterprises, which operates them as Countdown or Foodtown outlets. William Pears owns its share of the joint venture through its local subsidiary, Antipodean Supermarkets. Antipodean’s accounts for the year to April 2009, the latest period for which accounts have been published, show that it received rental income of $7.46m for the year, but made a pre-tax loss of $19.3m, largely as a result of high debt servicing costs. The company had $112.4m of debt.

“Several prominent local investors have also put substantial retail premises on the market, in some cases to reduce debt and in others to reinvest into other projects. These include Retail Property Group, which is selling several stores including a Countdown supermarket, in its Westgate (Auckland) and Fraser Cover (Tauranga) shopping centres. It will use the money to reduce debt and redeem the shares of minority investors who were supposed to be paid out in April 2008. The smaller stores will probably be bought by individuals or family trusts but the supermarket would be too expensive for most private investors, while most institutional investors are not expanding their portfolios at the moment. So it is being marketed for sale as a syndicated investment being put together by Augusta Funds Management.

“Ladstone Developments, a private investment company owned by Graeme and Dallas Pendergrast, is selling the individual shops in the Rialto Centre at Newmarket in Auckland. Ladstone bought the property from National Property Trust in September last year and has now put the retail premises on strata titles to sell them individually. Defensive Investments, a company jointly owned by boutique Auckland investment house CapitalGroup and a family investment company, is selling two of the Countdown supermarkets it purchased from Brookfield Multiplex Funds Management in 2009”. See our commentaries for August and December 2003, March 2007 and January 2008, for further details of Antipodean’s supermarket and shopping centre purchases in Aotearoa.

And Another Overseas Share Shuffle, This Time It’s Wharekauhau Lodge

N&B Enterprises Limited William P Foley II, United States of America (53.7%), Nico De Lange, New Zealand (25%), Thomas M Hagerty, United States of America (21.3%) has received approval for an overseas investment in sensitive land, being the Applicant’s acquisition of:

A 100% freehold interest in 899 hectares of land at Western Lake Road, South Wairarapa District and known as the Wharekauhau Land; and
A 67% freehold interest in 51.25 hectares of land at Western Lake Road, South Wairarapa District known as the Joint Venture Land.

Approval was also received for an overseas investment in sensitive land, being the Applicant’s acquisition of rights or interests in 47.6% of the shares of Wharepapa Station Limited which owns or controls a freehold interest in 484.77 hectares of land at Western Lake Road, South Wairarapa District and known as the Wharepapa Land. Consideration was stated as confidential. The vendor was Wharekauhau Holdings Limited James Davidson, United States of America (38%), Michael Baybak, United States of America (20.2%), James Blanchard III, estate of, United States of America (10.3%), Lord William Rees-Mogg, United Kingdom (except Isle of Man and the Channel Islands) [8.8%], Charlotte Casey, United States of America (8.8%), William Shaw, New Zealand (6%), Annette Shaw, New Zealand (6%), Sir Roger Douglas, New Zealand (0.9%), all well known warriors of the Right, Douglas of course having the Roger Award named after him.

The OIO states: “Wharekauhau Holdings Limited (WHL) operates a resort (Wharekauhau Lodge and Country Estate) and farming business from the relevant land. Wharepapa Station Limited (WSL) operates a farming business from the adjoining Wharepapa Station. WHL currently owns 47.57% of the shares in WSL. The Applicant’s acquisition of WHL’s assets and its shares in WSL will provide substantial and identifiable benefits to New Zealand through stable long-term ownership of the facility by people with considerable knowledge and experience both in the tourism and lodge industry and in business generally, providing access to further capital to facilitate refurbishment and construction of new facilities, providing additional employment for New Zealanders, securing certainty for existing employees and increasing the number of international tourists to the region”.

For further details regarding these properties, see our commentaries to previous decisions in November 1995, June 1996, August 1996, and January 1999. Also read Bill Rosenberg’s “The Intriguing Story Of Roger Douglas And His Unpleasant Friends At Wharekauhau Lodge”, Watchdog 84, May 1997. These associations provide evidence of Douglas’s links with the far right in the USA and UK.

Newmont Mining Prepares To Open A Third Mine

Waihi Gold Company Limited Newmont Mining Corporation, United States of America (100%) received approval for the acquisition of a freehold interest in 2.4028 hectares of land at 29 Clarke Street, Waihi. Consideration was $495,000. The vendors were William Henry Keatley and Kayleen Jessie Keatley William Henry Keatley, New Zealand (50%) Kayleen Jessie Keatley, New Zealand (50%). The OIO states: “The Applicant owns and operates the Martha and Favona mines at Waihi. The Martha mine has operated for 22 years, and the Applicant commenced mining gold and silver from the Favona underground mine in 2006. The Applicant is in the process of applying for the necessary resource consents for a proposed new mine at Waihi (Trio mine). Access to the Trio mine will be through the existing portal/entrance for the Favona underground mine. The Applicant intends to acquire the relevant land to provide a buffer for the possible vibration effects that may be experienced from the production blasting for the proposed Trio mine”.

Waihi Gold or Newmont Mining has had a chequered history at its Waihi sites. It has had to buy numerous properties around the town because of subsidence caused by its mining operations or to act as a buffer as stated in the above approval. See our monthly commentaries during 2002 to 2005. Its’ activities have seen it twice nominated for the Roger Award. Also see “US Mining Giant’s Reign Of Terror; Booms Create Bust In Waihi”, by Andy Hatton, in Watchdog 102, May 2003.

Australians To Help Chatham Islands Harness Wind Power

In one of the few examples of positive foreign investment, Chatham Islands Wind Limited CBD Energy Limited, Australia (100%) received approval to acquire a leasehold interest in 2.5 hectares of land at Waitangi Wharf, Owenga Road, Chatham Islands. The vendors were Alfred Wesley McAlister Preece and Robyn Evelyn Preece New Zealand (100%). The consideration was $103,260. The OIO states: “The Applicant has been selected to build a new electricity wind generation and system integration facility on the Chatham Islands. The site for the wind farm comprises 2.5 hectares of farm land near Owenga, which is to be leased by the Applicant for 20 years. The wind generation project will have significant benefits for the residents of the Chatham Islands, as it will remove reliance on the five diesel powered generators currently used to generate power on the Chatham Islands”. The 700 Chatham Island residents currently have power bills as much as 10 times higher than for mainland New Zealanders, so hopefully they will see a significant reduction in these once the two wind turbines are installed, which is scheduled for the end of 2012.

Germans Buy Te Kohi Station And Ikanui

Grandy Lake Forest (NZ) Limited Eberhard Gemmingen, Germany (33.4%) Wolf-Eckart Gemmingen, Germany (33.3%) Albrecht Gemmingen, Germany (33.3%) received approval for the acquisition of a freehold interest in 408.3 hectares of land at 1079 SH2, Wairoa known as Te Kohi Station; and a freehold interest in 275.4 hectares of land at 1079 SH2, Wairoa known as Ikanui. Consideration was $3,093,750. The vendors were Robert David Pryde and Vanessa Gwenneth Pryde New Zealand (100%) Te Kohi Wairoa Limited Robert David Pryde, New Zealand (50%) Vanessa Gwenneth Pryde, New Zealand (50%)

The OIO states: “The Applicant is an experienced forestry investor operating in Germany, North America and New Zealand. The proposed transaction is a continuation of the Applicant’s previous investments in New Zealand’s forestry sector. The land is currently operated as a sheep and cattle farm but is unprofitable. The Applicant will establish a pinus radiata forest on the land. There will also be smaller areas of redwood and eucalyptus”. But it seems this investment isn’t welcome by the locals and Federated Farmers. As reported by Debbie Gregory in the Gisborne Herald (8/9/10):

“The sale of two Wairoa farms to German forestry investors is another nail in the coffin for Wairoa, says former Gisborne Wairoa Federated Farmers President Jean Martin. Consent was granted by the Overseas Investment Office last month for Grandy Lake Forest (NZ) Limited to buy Robert and Vanessa Pryde’s Ikanui (275ha) and Te Kohi Station (408ha) for $3,093,750. Eberhard, Wolf-Eckart and Albrecht Gemmingen own a third each of Grandy Lake Forest, operating in Germany, North America and New Zealand.

“The OIO decision says the land was operated as a sheep and cattle farm but was unprofitable. A pinus radiata forest and smaller areas of redwood and eucalyptus would be planned on the land. Mrs Martin said she had been told there were another eight farms under consideration for forestry. Wairoa’s Affco plant was under a cloud and other service industries in Wairoa would be threatened, such as farm supplies, vets, farm workers and schools. A 1995 Ministry of Agriculture and Forestry resource document on the impacts of land-use change in Wairoa said rural depopulation was one of the likely impacts of switching from farming to forestry. On-farm employment losses would have the greatest impact on rural districts and communities.

“‘Where land-use change is concentrated on particular districts, rural schools may no longer be viable through falling rolls, while other district services such as school buses, rural mail deliveries and commercial transport may also become non-viable’. The report said that for every 100 direct jobs created on-farm in the district, 55 indirect jobs were generated. In addition, for every $100 of direct gross household income, there was a further $33 of indirect income.

“Letters have been written to the Ministers for Agriculture and Social Welfare, requesting a social impact study in the Wairoa and Gisborne area. Federated Farmers’ national President, Don Nicolson, said if large scale conversion to trees took place, it would ‘rip the heart’ out of rural towns and provincial centres. ‘At this scale of planting, vulnerable regional economies, like the North Island’s East Coast, would be levelled’. Federated Farmers strongly believed farm forestry was integral to farms where it was suited”. Grandy Lake Forest previously gained approval to buy significant tracts of land in July 2000, September 2001, July 2004, August 2005, and July 2008. See our commentaries for those months for further details.

Other July Decisions

Craggy Range Vineyards Limited Terrence Elmore Peabody, Australia (99%) Stephen Mark Smith, New Zealand (1%) received approval for the acquisition of a leasehold interest in 9.82 hectares of land at Old Renwick Road, Marlborough. Consideration was $1,828,125. The vendor was White Cottage Vineyards Limited Stephen Mark Smith, Laura Bridget Cunningham Smith and Martin John Brown as trustees of the S & L Smith Family Trust, New Zealand (100%).

The OIO states: “The Applicant is an established winemaker and owns and leases vineyards with a total planted area of approximately 300 hectares. In addition, the Applicant sources grapes from independent growers throughout New Zealand. The Applicant proposes to acquire a leasehold interest in the land which contains an established vineyard of 8.4 hectares. The Applicant requires certainty of supply and assurance of quality for its winemaking business. The acquisition of the leasehold interest will enable the Applicant to secure a long-term supply of the grapes”. See our commentaries for December 1998, October 2000, July 2004, October 2005, August and September 2006, and July 2009 regarding other Craggy Range purchases here.

Duncan James Macgregor Ramsay and Fiona Jane Ramsay Thailand (100%) received approval for the acquisition of a freehold interest in 0.6405 hectares of land at Luggate-Cromwell Road, Central Otago. Consideration was stated as confidential. The vendor was Penturen Estates Limited Gerald Robert Somerville and James Montgomery Somerville, New Zealand (60%) Gerald Robert Somerville, New Zealand (40%) The OIO states: “The land adjoins a vineyard currently owned by the Applicants. The vineyard is planted in Pinot Noir, Pinot Gris, Chardonnay and Riesling grapes. The Applicants propose to amalgamate the two properties. A house on the land is leased by the vineyard’s manager. The Investment will provide the Applicants with permanent accommodation for their vineyard manager and seasonal vineyard workers, and additional equipment storage facilities for the vineyard. The Investment also provides the Applicants with future options to establish a ‘cellar door’ wine tasting facility should the Applicants decide to produce their own wine label”.

Anna and Liviu Fridman Israel (100%) received approval for the acquisition of a freehold interest in 2.58 hectares of land at The Coastal Highway, Tasman District; and a freehold interest in 13.75 hectares of land at Williams Road, Tasman District; and a freehold interest in 19.42 hectares of land at Horton Road, Tasman District. Consideration was $1,364,625. The vendor was Sebastien Vineyard Limited Russell Arthur Poole New Zealand (50%), Claudia Anne Poole New Zealand (50%) The OIO states: “The Applicants are Israeli citizens intending to reside in New Zealand indefinitely. They have been granted Long Term Business Visas, and intend to develop an olive orchard on the land.”

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