Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – July 2018 Decisions

Soper Wheeler/NZ Redwood Co buys more land for forestry

The New Zealand Redwood Company(family shareholders representing the decedents* of the founder Soper and Wheeler families, USA 100%) has consent to acquire approximately 1,148 hectares at 1190 Ohura Road, Matiere, near Taumaranui, from Graham Francis Robertson, Elizabeth Constance Walton Robertson and Bailey Ingham Trustees Ltd as trustees of the Tarata No 2 Trust (NZ 100%) for $7 million. * In legal terms, a decedent is a dead person. Ed

The OIO states that the NZ Redwood Co is an American owned forestry company specialising in the cultivation of redwood trees. The property is currently farm land which Redwood intends to convert into a redwood forest. The conversion of the property to redwood forestry is likely to:

Increase jobs by approximately six full time equivalent employees per annum on average over the life of the forest;
Increase the export receipts and the processing of primary products in New Zealand through exporting the majority of the redwood products to North America in a processed form;
Provide enduring walking access across the land; and
Advance the one billion trees policy through planting approximately 650 hectares of trees.

What are they doing with the other 498 acres? The New Zealand Redwood Company was formed in 2001 (as JPS) by Soper Wheeler Company (established 1904) manages 97,000 acres of forestland in California. The NZ Redwood Company Website says NZ redwood has growth rates similar to pinus radiata, higher than Douglas Fir and better than redwood in California due to NZ’s high, even, rainfall.

As well as owning forests, it propagates redwood from seed, and sees a future for redwood in the US, Asian and carbon sequestration markets. It supports a NZ Institute of Forestry scholarship. For other land purchase consents for the NZ Redwood Company, see November 2013 (Taumaranui), October 2009 (Hunterville), March 2007 (Geraldine). For earlier purchases as JPS, see December 2004 (Kaikoura), June 2002 (Hunterville), July 2002 (Canterbury), February 2002 (Geraldine), January 2002 (North Canterbury), December 2001 (Clutha), and August 2001 (Hokonui, Southland).

Sumitomo Corp Buys Whanganui Council Land For forestry

Summit Forests NZ Ltd (Sumitomo Corp, Japan 100.0%) has consent to acquire approximately 1,241 hectares near Whanganui from Whanganui District Council (NZ 100%) for $13 million. Summit Forests NZ Ltd (Summit) operates an extensive forestry estate in New Zealand, mostly in Northland. Summit now wishes to establish a forestry portfolio in the Whanganui region. The acquisition is expected to result in a substantial and identifiable benefit to New Zealand. It is likely to advance the Government’s strategy to plant one billion trees between 2018 and 2027

It will also result in the offer of approximately 148 hectares to a local iwi for nil consideration (once Summit has identified the appropriate iwi to receive the offer). Summit has committed to obtaining Forestry Stewardship Council or Programme for the Endorsement of Forest Certification (PEFC) certification in respect of the forests on the land and to grant protective covenants in respect of significant areas of indigenous vegetation. The acquisition will also result in Summit allowing public access to the land for hunters, walkers and mountain bikers who have been issued with a permit. In addition, permit-free access will generally be provided on Sundays and public holidays.

See more about Summit Forests and its parent company , including Forestry Stewardship Council registration for its NZ and Russian forests. See June 2017 for consent for Summit to buy land in Northland. Summit Forests is a New Zealand registered subsidiary company of Sumitomo Corporation Japan and Sumitomo Australia Pty Ltd. Sumitomo says it is an “integrated trading company” comprising 790 companies and 72,000 employees operating in over 65 countries. For Summit Forests purchases in Northland, see the OIO Decisions of June 2017, August 2016, December 2015, September 2014 and November 2012.

US Dairy Farms Leases More Land In Ashburton

Dairy Farms NZ Ltd (US 50.05%; NZ 41.25%; Australia 7.07%; UK 1.63%) has consent to acquire leasehold interests in approximately 254.7 hectares at 30 Waipuna Road, Lowcliffe, Ashburton, from Hugh James Boulton, Joanne Jean Jackson, John Edward Albert Drayton as trustees of the Hugh and Joanne Boulton Family Trust (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.

The OIO states that Lowcliffe Dairies is a 100% subsidiary of Dairy Farms NZ Ltd. Dairy Farms NZ Ltd is a company created to hold farming investments. Via Lowcliffe Dairies, it currently leases approximately 183.4 hectares of the land for grazing cows milked on the adjoining dairy farm (with the relevant infrastructure) owned by Lowcliffe Dairies.

Dairy Farms (via Lowcliffe Dairies) intends to lease approximately 71.3 ha. of additional land (increasing the total to approximately 254.7 ha.) to further expand its dairy milking operations by grazing additional cows that will be milked on the adjoining dairy farm. The final expiry date of the lease is 31 May 2027 (including all renewals). The OIO states that the benefits to New Zealand result primarily from the leased land adjoining an operational dairy farm owned by Lowcliffe Dairies and include

increased milk processing;
increased export receipts;
increased productivity and efficiency;
additional capital investment for development purposes; and
a high level of New Zealand participation.

See June 2014 for consent for Dairy Farms NZ Ltd to buy the Lowcliffe dairy farm at 196 & 274 Trig Pole Rd, Lowcliffe, Canterbury, with investment from US billionaire Sam Zell through his private equity entity EGI-NZ Dairy LLC (NBR, 4/7/14, ) before Dairy Farms NZ’s float on NZX.

See December 2015 for consent for Dairy Farms to acquire five adjourning farms at Otapiri, Southland for $47.1 million and EGI-NZ Dairy‘s acquisition of 55% of Dairy Farms Ltd ( Stuff, 29/1/16, ).

Haier Restructures Ownership Of Fisher & Paykel

Haier Singapore Investment Holding Pte Ltd (China Public 56.1%; various overseas 33.2%; US Public 5.9%; Singapore Public 4.7%) has consent to acquire 100% of the ordinary shares of Haier NZ Investment Holding Co Ltd, from Haier (Singapore) Management Holding Co Pte Ltd (Haier Group Corporation, China, PR 100%) for $US856,087,267, being approximately $NZ1,233,097,000.

Haier Group Corporation, a global manufacturer of home appliances headquartered in China, owns 41% of Qingdao Haier Co Ltd (“Haier 690”) and indirectly owns 100% of both Haier NZ Investment Holding Co and its vendor Haier (Singapore) Management Holding. Haier 690 indirectly owns 100% of the applicant, Haier Singapore Investment Holding Pte. Listed on the Shanghai Stock Exchange, Haier 690 manufactures and sells household appliances and electronic products, distributes products in domestic and export markets, and raises capital and undertakes investments in appliance businesses. Haier 690’s brand portfolio currently includes Haier, Casarte, Aqua and GE Appliances.

The OIO states that in October 2012 Haier (Singapore) Management Holding Co was granted consent for Haier NZ Investment Holding Co to make a takeover offer of Fisher & Paykel Appliances Holdings Ltd in October 2012. Haier (Singapore Management Holding has owned 100% of Fisher & Paykel since then. Fisher & Paykel is a leading designer, manufacturer and distributor of high-end white household appliances. This transaction is part of an internal restructure within the Haier Group, which intends that Fisher & Paykel will be able to interact more closely with Haier 690 and its other appliance businesses

This will improve Haier 690’s brand portfolio, advance its global large kitchen strategy, and gain synergies in production, marketing, and research and development in China and overseas. Haier Group Corporation has satisfied the OIO that the individuals who will control the investment have the relevant business experience and acumen and are of good character. Haier Group has also demonstrated financial commitment to the investment. See commentary of October 2012 for “Iconic Fisher & Paykel Swallowed Up By Haier”, and March 2016 for sale of F&P’s financial products to Flexigroup.

Luxembourg-Based Equity Fund Buys 125 Queen St

NZRE Corgi Ltd (US Public 54.7%; Switzerland Public 17.2%; Netherlands Public 8.7%; UK Public 5.3%; Germany Public 5.3%; Singapore Public 3.5%; Hong Kong Public 3.4%; Canada Public 1%; Luxembourg Public 0.9%) has consent to acquire approximately 0.2 hectares of non-sensitive land (including building) at 125 Queen Street, Auckland for a consideration exceeding $100 million.

While containing a historical commercial building, the land is not sensitive, because it is located in central Auckland and not adjoining foreshore, with a surveyed area for less than 0.4 hectares. The vendor is Special Situations Assets Ltd (US Public 53%; Australian Public 36%; Canada Public 6%; various overseas 5%). The price is $214 million.

The OIO states that NZRE Corgi is a special purpose vehicle of the Invesco Real Estate Asia Fund. Established in Luxemburg, the fund invests in real estate and other assets (office, industrial, retail and apartments) mainly in the Asia Pacific region. This acquisition is a commercial office tower with a retail space, with approximately 26 tenancy arrangements in place, and vacant space still to be tenanted.

NZRE Corgi intends to continue running the building as a commercial property. NZRE Corgi has satisfied the OIO that the individuals who will control the investment have the relevant business experience and acumen and are of good character. The applicant has also demonstrated financial commitment to the investment.

This building is an 1880s’ façade, enclosing a 1980s’ 24-storey glass tower, with an ASB branch and a new dining precinct at ground level. See May 1996 for consent for the building to be bought by Milverton International Investments, based in the Virgin Islands, a tax haven country (as is Luxembourg). Special Situations Assets is another overseas fund with half its shareholders in the US.

Stuff says Special Situations bought the building in 2015 from the Sultan of Brunei for $57 million – the biggest property deal in that year in New Zealand (Chris Hutching, 3/9/18. Invesco is an investment management company which “offers global and domestic separately managed account products for high-net-worth individual and institutional clients”. NZRE Corgi was registered as an NZ company on 24 August 2018, with country of origin stated to be the Virgin Islands.

American To Build Luxury Lodge On Waiheke

Waiaua Bay Farm Ltd (Julian Hart Robertson , Jr, USA 100%) has consent to acquire approximately 34 hectares at 341 Gordons Road, Waiheke Island, Auckland, from Christopher James Reeve as trustee for MA Reeve Trust (NZ 100%) for $18.9 million. The OIO states that Waiaua Bay Farm is ultimately owned by an American, Julian Robertson. He has previously invested in hospitality ventures in New Zealand and has three existing luxury lodges, namely Kauri Cliffs, Cape Kidnappers and Matakauri. He intends to construct a luxury lodge on the land which will accommodate 30 to 40 guests.

The construction and operation of the lodge is likely to result in new job opportunities on Waiheke Island and new investment in New Zealand. Robertson intends to provide walking access to the coast and to a lookout point on the property. He also intends to undertake a managed ecology programme on the property to restore wetlands and undertake pest control and re-vegetation of parts of the land. Wikipedia describes Julian Robertson as a hedge fund billionaire who in 2008 said he shorted subprime securities and made money through credit default swaps. Before the billions, he once spent a year in NZ writing a novel.

Action Manufacturing Relocates Caravan Works To Te Rapa

Action Manufacturing LP (formerly RV Manufacturing Group LP) (NZ Public 85%; Hong Kong Public 6.1%; US Public 4%; Australian Public 3.45%; various 1.45%) has consent to acquire a leasehold interest in approximately 1.4589 hectares of land at 32 Kaimiro Street, Te Rapa, Hamilton. The land is sensitive, because it is over 0.4 ha. and adjoins Pukete Farm Park, a recreation reserve of over 70 ha.

The lessors are John Mervyn Cook and Paul Lewis Middlemiss as trustees of the Kaimiro Trust. (NZ 100%). The price is $8,625,000.

The OIO states that Action Manufacturing is the largest vehicle manufacturer in New Zealand, making campervans, motorhomes, recreational vehicles and specialist vehicles (i.e. ambulances and mobile clinics). Action Manufacturing has two factories, in Auckland and Hamilton. As the land is close to the Hamilton factory which is operating at full capacity, they plan to relocate the Hamilton premises to the land to allow manufacturing growth and meet increasing export demand in Australia.

Action Manufacturing intends to develop the land into a multifunction manufacturing environment that will allow it to increase production, resulting in additional jobs, exports and development capital to modify and develop the land. The OIO summary states that an alternative lessee may use the land principally for warehouse storage and offices, similar to its current use. The land is possibly used for engineering or manufacturing purpose by another lessee; however, the scale and nature of the possible land development is unclear. The lessor of the land is a New Zealand trust, with all trustees and beneficiaries being New Zealand citizens.

Since Action Manufacturing seems to be less than 25% overseas owned, the reason for seeking consent must be because the land is adjacent to regional park land – but the application doesn’t address any possible impacts on this. It may be the Hamilton operation that they are moving to this site, rather than the premises.

Action Manufacturing currently employs 150 in its two factories. The Companies Register says its shares are held equally by Tourism Holdings Ltd (formerly The Helicopter Line) which is NZX listed and Alpine Bird Manufacturing (formerly Kea Motorhomes). The RV Supercentre Website says Action Manufacturing facility was created by bringing together KEA, Motek (formerly known as CI Munro), and United Campervans.

In August 2018 Action Manufacturing announced the acquisition of refrigerated truck body and trailer manufacturer Fairfax Industries as part of a long-term growth strategy, particularly in refrigerated transport. Fairfax has operated for over 40 years and in Takanini, South Auckland and has 60 employees (Moffiet, Transporttalk, 22/8/18, ).

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