Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – February 2016 Decisions

Americans Increase Ownership Of 80,000 Hectare Matariki Forest To 100%

Rayonier Canterbury LLC, United States Public (99.9%), and various overseas persons (0.1%), received approval for the acquisition of rights or interests in the up to 100% of the shares of Matariki Forestry Group which owns or controls:

a freehold interest in approximately 74,220 hectares of land; and
a leasehold interest in approximately 5,155 hectares of land

at various locations through out New Zealand.

An overseas investment in significant business assets, being the Applicant’s acquisition of rights or interests in up to 100% of the shares of Matariki Forestry Group, the consideration of which exceeds $100m.

Consideration was $191,494,021; the vendors were Matariki Forests Australia Pty Limited and Waimarie Forests Pty Limited, United Kingdom Public (34.4%), Luxembourg Public (29%), various overseas persons (24.3%), Swedish Public (7.1%), and Dutch Public (5.2%). The OIO states: “The Applicant began operating in New Zealand in 1988 and significantly expanded its presence in 1992 with the purchase of significant forestry and related assets from the Government. The Applicant is currently the majority shareholder in Matariki Forestry Group (Matariki), New Zealand’s third largest forestry company, having acquired its initial interest in 2005”.

“In 2013, the Applicant was granted consent to acquire up to 100% of Matariki, and while it increased its shareholding to 65%, it did not acquire the remaining shares and that consent has now expired. The Applicant has therefore sought consent again to increase its shareholding in Matariki to 100%. This will enable Matariki to repay debt and continue to run its business, without needing to cut costs”. See our August 2005 commentary for details of Matariki’s original purchase of 92,000 ha, and February 2013 commentary for details of Rayonier’s original 65% purchase

Turners And Growers Plans Another Apple Orchard

T&G Global Limited, Federal Republic of Germany (73.1%), New Zealand Public (26.8%), and various overseas persons (0.1%) received approval via their subsidiary Apollo Apples (2014) Limited for the acquisition of a leasehold interest in approximately 17.3 hectares of land at 42 Raymond Road, Haumoana, Hawkes Bay. Consideration was “withheld under s(9)(2)(b)(ii) of the Official Information Act”; the vendor was Endsleigh Cottages Limited, New Zealand (100%)

The OIO states: “Apollo Apples (2014) Limited, a 100% subsidiary of T&G Global Limited, intends to acquire the land to develop an orchard. As the land has previously been used for cropping, the development of an apple orchard is likely to create job opportunities, as well as increased export receipts for New Zealand exporters”. See our March 2012 commentary for details of the Germans’ original purchase of Turners and Growers and our November 2014 and October 2015 commentaries for details of T&G Global’s other purchases here.

Aussie Detention Centre Operator Sold To Spanish Transnational

Ferrovial Services Australia Pty Limited, Spanish Public (58.1%), United Kingdom Public (11.4%), United States Public (11.3%), Belgium Public (6.2%), Luxembourg Public (5%) and various overseas persons (8%), received approval for acquisition of rights or interests in up to 100% of the shares in Broadspectrum Limited which will result in:

an overseas investment in significant business assets as the value of the New Zealand assets of Broadspectrum Limited and its 25% or more subsidiaries is greater than $100m; and
an overseas investment in sensitive land, as Broadspectrum Limited or its subsidiaries are likely to own or control:
a leasehold interest in approximately:
- two hectares of land at 59 Glenlyon Avenue, Tauranga;
- 10.3 hectares of land at Kawakawa;
- 20.9 hectares of land at Whangarei;
- 21.3 hectares of land at Russell Whakapara Road;
- four hectares of land at Springvale Road, Clyde;
- 4.3 hectares of land at SH11, Puketona Road;
- seven hectares of land at TCDC Thames Depot, Burke Street, Thames;
- 0.4 hectares of land at Pound Street, Coromandel;
- 34.5 hectares of land at SH1, Kaikohe; and
- a freehold interest in approximately one hectare of land at Raymond Street, Bunnythorpe.

The vendors were existing shareholders in Broadspectrum Limited Australian Public (94%) and United States Public (6%); the asset value was $452,113,000 The OIO states: “Ferrovial Services Australia Pty Limited is a wholly owned subsidiary of Ferrovial SA, a multinational corporation which operates around the world as an infrastructure operator and municipal service company including as an investor in, and operator of, significant infrastructure such as Heathrow Airport. The Applicant has advised that the Investment is an opportunity for Ferrovial to expand its existing Australian operations in a way that is consistent with its stated strategic international focus”. Broadspectrum operates a number of controversial detention centres on behalf of the Australian government including Nauru and Manus Island in Papua New Guinea.

Aussies Buy 3,843 Hectares Of Forests In Wairarapa

Wairarapa Estate Limited, The Trust Company (Australia) Limited, as trustee for the New Forests Australia New Zealand Forest Operating Fund 2 (100%), which is wholly owned by certain overseas investment funds. The New Forests Australia New Zealand Forest Operating Fund 2 is managed by New Forests Asset Management Pty Limited received approval for the acquisition of a freehold interest in approximately:

259.9 hectares of land at Haurangi Road, Ruakokoputuna, Wairarapa; and
2,748 hectares of land at Craigie Lea and Te Wharau Roads, Te Wharau, Wairarapa; and
215.8 hectares of land at Kaiwhata Road, Masterton; and
340.8 hectares of land at Mangapurupuru Road, Bideford, Wairarapa; and
276.8 hectares of land at 3442 Ngahape Road, Ngahape, Wairarapa.

The vendor was Forest Growth Holdings Limited, IFS Growth Limited, New Zealand (51%) and Invercargill City Forests Limited, New Zealand (49%); consideration was “withheld under s(9)(2)(b)(ii) of the Official Information Act”. The OIO states: “The Applicant is acquiring a portfolio of commercial forestry plantations in the Wairarapa. The Applicant will implement mechanisms to protect indigenous vegetation and habitats of indigenous fauna on the land. The Investment will also result in the fencing off of saline springs on the land and the establishment of a forestry scholarship”.

Canadians Buy Waikato Dairy Farm

Hammond Dairy Farm Limited, Canadian government (100%), received approval for acquisition of a freehold interest in approximately 386 hectares of land at 669 Ohura Road, Aria, Waikato (the “Land”). The vendor was Dennis Greathead and LW Nominees Limited as trustees of Aria Ohura Trust, New Zealand (100%): consideration was originally “withheld under s(9)(2)(b)(ii) of the Official Information Act” – however on appeal by CAFCA it was released as $8,844,000.

The OIO states: “The Applicant is ultimately, indirectly, owned by the Public Sector Pension Investment Board. The Land is currently being used as a dairy farm. The Applicant intends to further develop the dairy farm and increase milk production. It will engage FarmRight to manage the land for that purpose. The Applicant intends to invest in the farm so as to increase productivity. In particular, the Applicant intends to:

reduce reliance on supplementary feed by transitioning to a pasture-based model;
increase the herd size run on the farm;
improve flow on the farm with a new automated dairy shed, new effluent system and upgraded farm layout; and
carry out aggressive re-grassing of the milking platform”.

Crafar Farms Owner Grabs The Kawarau Falls Development

It seems wishes do come true for those with enough money. New Wish Investment Limited, Rose Jiang, China, People’s Republic of (50%), and Zhaobai Jiang, China, People’s Republic of (50%), received retrospective approval for the acquisition of rights or interests in up to 100% of the securities of Double Excel Investments Limited, which owns or controls interests in various mortgages secured over approximately 2.5 hectares of land at Queenstown.

The vendor was Hongsheng Tao China, People’s Republic of (100%); consideration was $80,500,000. The OIO states: “This is a retrospective application which relates to the Applicant’s acquisition of interests in various mortgages secured over the Kawarau Falls development which includes the Queenstown Hilton. The owners of the property are currently in receivership”. The Jiangs are making a habit of buying prime New Zealand real estate at fire sale prices, having previously bought the Crafar Farms and Gulf Harbour development, also in receivership. See our April and August 2012 commentaries for details of these.

Guy Williams in the Otago Daily Times reported (1/4/16; sadly no April Fools’ joke): “The Overseas Investment Office has given approval for a Chinese billionaire’s $80.5million purchase of land at the Kawarau Falls complex near Queenstown. The decision, dated February 10 but publicly released yesterday, gives retrospective consent for New Wish Investment Ltd’s ‘acquisition of interests in various mortgages” secured over 2.5ha at Kawarau Falls. The complex consists of residential apartments and serviced apartments run as Hilton Queenstown and DoubleTree by Hilton”.
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“New Wish Investment is owned by Jiang Zhaobai and Jiang Rose. The former is 127th on Forbes magazine’s China Rich List and Chairman of Shanghai Pengxin Group. In 2014, the Otago Daily Times reported Shanghai Pengxin had bought the mortgage interests in the Kawarau Falls complex in May of that year. The OIO’s Decision said its approval related to New Wish Investment’s purchase of interests in up to 100% of the securities of Double Excel Investments Ltd which, in turn, owned or controlled interests in various mortgages secured over the land. The property’s owners were in receivership, the Decision said. Jobs, increased export receipts, additional investment for development purposes and walking access were factors considered by the OIO in assessing the application against the Overseas Investment Act’s ‘benefit to New Zealand’; criterion, the Decision said”.

Other February Decisions

Kerrytown Road Orchards LP, Bruce Douglas Allen and Julie Marie Allen, United States of America (25%), Dalton Blake Thomas and Pamela Lee Thomas, United States of America (25%), Walter George Meyer, William Jeffrey Meyer, Robert Scott Meyer and Megan Meyer Tweedy, United States of America (25%), Christopher Linder Clark, United States of America (24.85%) and Gregory DeCicio Clark, United States of America (0.15%), received approval for acquisition of a freehold interest in 20.2 hectares of land at 156 Kerrytown Road, Timaru. The vendors were Moffat (Stuart Douglas) and Moffat (Dale Gloria) New Zealand (100%); consideration was $1,300,000.

The OIO states: “The Applicant is acquiring the land to establish a Honeycrisp variety apple orchard. The Applicant intends to export the majority of apples produced, primarily to the USA. The Applicant considers South Canterbury’s temperate climate ideal for growing Honeycrisp apples”. See our August and November 2014 commentaries for details of other orchards purchase by some of the above shareholders.

Trig Hill Road Limited, Gull New Zealand Trust, Australia (100.0%), received approval for the acquisition of a freehold interest in 3.8 hectares of land at 315 Wainui Road, Silverdale, Auckland. The vendor was Donn Anthony Reid and Annette Helen Reid, New Zealand (100%); consideration was “withheld under s(9)(2)(b)(ii) of the Official Information Act”. The OIO states: “The Applicant is acquiring the land to develop a Gull service station, which is likely to increase competition in the Silverdale consumer petroleum products market”.

And finally for February, Ming Gu, China, People’s Republic of (100%), received approval for the acquisition of a freehold interest in approximately 10.1 hectares of land at 1147E Lake Hawea, Albert Town Road, Wanaka. The vendor was Paul Andrew LaHood and Checketts McKay Trustees Limited as trustees of the Lahood Family Trust No 2, New Zealand (100%); consideration was $2,375,000.

The OIO states: “The Applicant proposes to operate the dwelling on the land as a high-end family style guest house and vacation home. The Applicant plans to increase the occupancy rates of rooms in the dwelling through greater marketing of the property and utilising his connections. The Applicant will create one full time position and two part time positions as a result of the investment. Export receipts are also likely to increase through the attraction of overseas visitors”.

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