Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – March 2015 Decisions

Singapore Government Buys Prime Shopping Malls

Another busy month at the OIO with the most significant decision being Reco Otago Private Limited, Singapore Government, Singapore (100%), receiving approval for the acquisition of rights or interests in up to 100% of the shares of St Lukes Group (No. 2) Limited, which owns or controls freehold and leasehold interests in approximately 4.7 hectares of land at Newmarket. Approval was also received for an overseas investment in significant business assets, being the Applicant’s acquisition of rights or interests in up to 100% of the shares of Albany Shopping Centre Limited, Albany Shopping Centre (No.2) Limited, St Lukes Group (No.2) Limited, Manukau City Centre Limited, St Lukes Square (1993) Limited, and Riccarton Shopping Centre (1997) Limited, the consideration of which exceeds $100m. The vendor was St Lukes Group Holdings Limited Australian Public (99.3%) and New Zealand Public (0.7%); the asset value was $1,018,541,440.

The OIO states: “The Applicant is part of the GIC Group, an organisation that invests the foreign reserves of, and is ultimately owned by, the Government of Singapore. The Applicant intends to acquire an initial 49% of the shares in the various registered proprietors of the Westfield shopping centres at Albany, Manukau City, Newmarket, St Lukes and Riccarton. The Applicant may increase its shareholding to 100% under the terms of the consent. The Applicant regards the acquisition as offering strong prospects for long-term, sustainable growth consistent with the GIC Group’s underlying investment philosophy. The proposed transaction will increase its exposure to the New Zealand economy, thereby further diversifying its existing worldwide portfolio”. Readers will recall Reco receiving approval a couple of months back for the purchase of two office towers in downtown Auckland.

New Joint Venture For Transmission Gully And Other Regional Services

LS Holdco Pty Ltd, Leighton Holdings Limited (50% shareholding), 100% Australian publicly listed company, 69.6% held by a German publicly listed company and AIF VIII Singapore Pte Limited (50% shareholding), managed by an affiliate of Apollo Global Management LLC, United States of America (100%), received approval for the acquisition of property in New Zealand used in carrying on business in New Zealand. Consideration was $211 million being:

(i) contractual arrangements between Visionstream Pty Limited and Chorus New Zealand Limited (“Chorus”) for services regarding Chorus telecommunications infrastructure networks (such as build work, network maintenance and ultra-fast broadband deployment);

(ii) Visionstream Pty Limited’s subcontract to Leighton Contractors Pty Limited of some of the above services;

(iii) contractual arrangement between Leighton Contractors Pty Limited and Wellington City Council for road maintenance services (such as resurfacing, fencing, vegetation control and street cleaning);

(iv) contractual arrangements between Leighton Contractors Pty Limited and Wellington Gateway Partnership No. 2 LP (among others) in relation to construction and maintenance services for the Transmission Gully PPP project; and

(v) assets relating to the performance of the contracts and subcontract listed in items (i) to (iv) above,

The vendors were existing shareholders of Leighton Holdings Limited, 100% Australian publicly listed company, 69.6% held by a German publicly listed company; asset value was $1,036,700,000. The OIO states: “The Applicant is a joint venture between Leighton Holdings Limited and AIF VIII Singapore Pte Limited. Leighton Holdings Limited is currently undertaking a strategic review of its group businesses. The above Investment relates to a transaction that involves the Applicant’s acquisition of Leighton Contractors Services business and Thiess Services business”. See our June 2014 commentary for details of the OIO’s approval for the public private partnership (PPP; in which Leighton is involved) to build the Transmission Gully highway.

Swiss Buy Wellington ACC Building

Aitken Street Real Estate Netherlands BV & Credit Suisse Funds AG, Swiss Public (99.3%) and other investors, various (0.7%), received approval for the acquisition (in a series of two linked transactions) of property in New Zealand (being a freehold interest in 0.54 hectares at 19 Aitken Street, Wellington) where the total value of the consideration exceeds $100m. The vendor was AMP Capital Property Portfolio Limited, New Zealand Public and Various Entities, New Zealand (70.3%), New Zealand Superannuation Fund, New Zealand (29.7%); consideration was $161,873,369. The OIO states: “In November 2012 the Applicant acquired an undivided one half share in 19 Aitken Street, Wellington, and obtained a right of pre-emption over the Vendor’s remaining half share as set out in a co-owners’ deed. On 21 August 2014 the Applicant accepted the Vendor’s offer to sell the remaining half share to the Applicant”. The building located at this address is occupied by the ACC.

Li Ka-Shing Restructures His Global Empire

In two separate decisions, CK Hutchison Holdings Limited, various overseas persons (69.8%) and Trusts associated with Li Ka-shing, Hong Kong (SAR) (26.7%), and Li Ka-shing and Li Tzar Kuoi Victor, Hong Kong (SAR) (3.5%), received approval for the acquisition of rights or interests in 100% of the shares of Cheung Kong (Holdings) Limited which owns or controls:

a freehold interest in approximately 2.7 hectares of land at Auckland Collections Branch and Constellation Drive Refuse Transfer Station; and
a leasehold interest in approximately 0.3 hectares of land at Auckland Collections Branch and Constellation Drive Refuse Transfer Station; and
a freehold interest in approximately 123.2 hectares of land at Bonny Glen Landfill; and
a freehold interest in approximately 15.1 hectares of land at Greenmount Landfill and Auckland Municipal Branch; and
a leasehold interest in approximately 40.1 hectares of land at Greenmount Landfill and Auckland Municipal Branch; and
a leasehold interest in approximately 362.2 hectares of land at North Waikato Regional Landfill; and
a freehold interest in approximately 211.6 hectares of land at North Waikato Regional Landfill; and
a freehold interest in approximately 0.5 hectares of land at Rosedale Road Landfill; and
a freehold interest in approximately 1.1 hectares of land at Patiki Road Refuse Transfer Station; and
a freehold interest in approximately 6.7 hectares of land at Tauranga Refuse Transfer Station; and
a leasehold interest in approximately 0.4 hectares of land at EnviroWaste Gisborne Branch; and
a freehold interest in approximately 0.4 hectares of land at Chemwaste Christchurch Branch; and
a freehold interest in approximately 360.8 hectares of land at Crownthorpe Vineyard, 1370 Matapiro Road, Crownthorpe, Hawkes Bay; and
a freehold interest in approximately 200.5 hectares of land at Dashwood Vineyard, Redwood Pass, Marlborough; and
a freehold interest in approximately 142.1 hectares of land at Rarangi Vineyard, 53 Flaxmill Drive, Rarangi, Marlborough; and
a freehold interest in approximately 1629.6 hectares of land at Cheetham Salt, Lake Grassmere, Marlborough; and
a leasehold interest in approximately 117 hectares of land at Northbank Vineyard, Awatere Valley, Marlborough; and
a freehold interest in approximately 116.7 hectares of land at Woolshed Vineyard, Renwick, Marlborough; and
a freehold interest in approximately 81.2 hectares of land at Home Vineyard, Glasnevin Road, Waipara, Canterbury; and
a freehold interest in approximately 104.4 hectares of land at Deans Vineyard, 596 Georges Road, Waipara, Canterbury; and
a freehold interest in approximately 101.3 hectares of land at The Mound Vineyard, Georges Road, Waipara, Canterbury; and
a freehold interest in approximately 194.7 hectares of land at Claim Vineyard, Bendigo Loop Road, Bendigo, Central Otago.

Approval was also received for an overseas investment in significant business assets, being the Applicant’s acquisition of rights or interests in 100% of the shares of Cheung Kong (Holdings) Limited, the value of the assets of Cheung Kong (Holdings) Limited, and its 25% or more subsidiaries being greater than $100m.

In the second decision approval was received for an overseas investment in sensitive land, being the Applicant’s acquisition of rights or interests in 50.03% of the shares of Hutchison Whampoa Limited which owns or controls:

a leasehold interest in approximately 0.3 hectares of land at Auckland Collections Branch and constellation Drive Refuse Transfer Station; and
a freehold interest in approximately 2.7 hectares of land at Auckland Collections Branch and Constellation Drive Refuse Transfer Station; and
a freehold interest in approximately 123.2 hectares of land at Bonny Glen Landfill; and
a freehold interest in approximately 15.1 hectares of land at Greenmount Landfill and Auckland Municipal Branch; and
a leasehold interest in approximately 40.1 hectares of land at Greenmount Landfill and Auckland Municipal Branch; and
a freehold interest in approximately 211.6 hectares of land at North Waikato Regional Landfill; and
a leasehold interest in approximately 362.2 hectares of land at North Waikato Regional Landfill; and
a freehold interest in approximately 0.5 hectares of land at Rosedale Road Landfill; and
a freehold interest in approximately 1.1 hectares of land at Patiki Road Refuse Transfer Station; and
a freehold interest in approximately 6.7 hectares of land at Tauranga Refuse Transfer Station; and
a leasehold interest in approximately 0.4 hectares of land at EnviroWaste Gisborne Branch; and
a freehold interest in approximately 0.4 hectares of land at Chemwaste Christchurch Branch.

Approval was also received for an overseas investment in significant business assets, being the Applicant’s acquisition of rights or interests in 50.03% of the shares of Hutchison Whampoa Limited, the value of the assets of Hutchison Whampoa Limited, and its 25% or more subsidiaries being greater than $100m. The vendors were existing shareholders of Cheung Kong (Holdings) Limited, The Li Ka-shing Unity Trust, Hong Kong (SAR) (40.4%), Cayman Islands Public (39.4%), Hong Kong Public (20.1%) and various overseas persons (0.1%); asset value was stated at greater than $100,000,000.

The OIO states: “The Investment is a restructuring of the corporate structure and shareholdings of Cheung Kong (Holdings) Limited and Hutchison Whampoa Limited, Hong Kong-based companies. After completion of the Investment, the Applicant will be the new holding company of the Cheung Kong Group, which has interests in property, hotels, banking, energy, ports and shipping, aviation, telecommunications, retailing and various kinds of infrastructure investments worldwide”.

Asia’s Richest Man

This is part of a much larger restructure of Li Ka-shing’s global empire as a precursor to his retirement. As reported in the South China Morning Post (25/2/15): “Li Ka-shing’s massive restructuring plan for his business empire moved a step closer to completion after Cheung Kong (Holdings) shareholders approved the reorganisation proposed for the company and associate Hutchison Whampoa. Cheung Kong said nearly 100% of votes from shareholders at a general meeting yesterday morning had been in favour of the plan.

“Li – Asia’s richest man and the Chairman of both Cheung Kong and Hutchison, which have a combined market capitalisation of $HK797.24 billion – announced on January 9 that his two flagship companies’ non-property assets, including ports, telecommunications, retail, infrastructure and energy, would be injected into newly formed CK Hutchison Holdings, which was incorporated in the Cayman Islands. All property businesses, including those overseas, of the two companies would be injected into Cheung Kong Property Holdings, which would seek a stock exchange listing and become one of the city’s largest-listed property companies.

“Li said earlier that the planned reorganisation, described by analysts as the group’s biggest restructuring since 1997, was aimed at unlocking value in both companies. But the sweeping restructuring – which will switch the incorporated base of Li’s companies to the Cayman Islands from Hong Kong – added fuel to rumours that his interest in the city was waning. Under the restructuring plan, Cheung Kong shareholders will receive one share in a newly registered CK Hutchison Holdings (CKH Holdings) for every Cheung Kong share, while CKH Holdings will offer Hutchison shareholders 0.684 of a CKH Holdings share for every Hutchison share. All eligible CKH Holdings shareholders will receive one CK Property share for every CKH Holdings share. The plan also requires approval by the independent shareholders of Hutchison. Victor Li Tzar-kuoi, Deputy Chairman of Cheung Kong, said he did not expect all Hutchison shareholders would approve it. But in general, shareholders applauded, Cable TV quoted Victor Li as saying at the general meeting. Li Ka-shing did not reveal his retirement plan but said he would retire one day. ‘Working time is limited … this is regrettable’, he said. Assuming Hutchison shareholder approval is forthcoming, the deal is expected to close in June…”

See our July 2008 commentary for details of Li Ka-shing’s most significant purchase here, the Wellington Electricity Network. See our April 2013 commentary for details of his purchase of Envirowaste. He has had unsuccessful forays here before, though. In December 2008 he was unsuccessful in his application to buy NZ Steel and in 2006 attempted to buy a controlling interest in Lyttelton Port Company. No doubt he will have a second crack at the Lyttelton Port Company should the Christchurch City Council proceed with sale of key Council assets.

Aussie Buys 1,000 Hectare Wheturau Station

Te Hau Station Limited, Phillip Maxwell Colebatch, Australia (100%), received approval for the acquisition of a freehold interest in approximately 1,037.3 hectares of land at 404 Armstrong Road, Whatatutu, Gisborne. The vendor was Bremner Pastoral Properties Limited, William Andrew Douglas Bremner, New Zealand (50%), and Rosemary Jane Bremner, New Zealand (50%); consideration was “withheld under section 9(2)(b)(ii) of the Official Information Act”.

The OIO states: “The Applicant has been granted consent to acquire a 1,037 hectare sheep and beef farm known as Wheturau Station. The Applicant plans to integrate Wheturau Station into its existing farming operation (which includes an adjoining farm) and implement a range of environmental initiatives”. Kristine Walsh at the Gisborne Herald reported on this sale (11/5/15).: “The Overseas Investment Office has approved the sale of a large piece of land at Whatatutu, paving the way for the new owner to create a substantial single holding of nearly 3670 hectares. New Zealand First Leader Winston Peters last year said he wanted to block the sale to foreign buyers of the 1,037ha Wheturau Station, 65 kilometres inland from Gisborne.

“However, the OIO now says the owner, Bremner Pastoral Properties, can sell the property to Australian investor Phillip Colebatch (Antipodean Lands), who adds it to his adjacent properties – Te Hau Station (2,307ha) and Whatatutu Road (234ha) – which he runs along with the 797ha Matawai holding, Moanui Station. Between them they represent an investment in this region of around $24 million – $11.25m for Te Hau Station, $3.27m for Whatatutu Road, $4.16m for Moanui Station, and around $5.5m for Wheturau Station. The price of Wheturau was withheld but Mr Peters says it was marketed at that level. In granting consent for the transfer of the sheep and beef farm Wheturau Station, the OIO said that allowing Mr Colebatch to integrate it with his existing properties would make for more efficiency and ‘enhance the viability of other investments’. For his part, Mr Colebatch committed to implementing a range of environmental initiatives, creating walking access, and offering to sell the property’s riverbed to the Crown. Because of this, the ‘substantial and identifiable benefit to New Zealand’ criteria of the Overseas Investment Act (2005) had been met, the OIO said.

In securing approval for his earlier purchases, the United Kingdom-based Mr Colebatch – a high-flyer in international business who earned a PhD in Business Administration at Harvard – had satisfied the OIO that he had the experience and acumen required to run the farms, and was prepared to make the necessary financial commitment. Since the Whatatutu holdings have been combined, the owners have worked to bring the management of all farms under one structure, and have sought to employ a new breeding manager to oversee operations at both Whatatutu and Matawai.

“‘Antipodean Lands has invested significant additional capital in these properties to enable them to realise their full potential, while also ensuring the farms are managed to high environmental standards’, says recruiting company Rural Directions”. See our May 2008 commentaries for details of Colebatch’s purchase of Te Hau and Moanui stations, and September 2011 commentary for details of his Whatatutu Rd purchase.

Chinese-Owned Waste Management Buys Balance Of Living Earth

Waste Management NZ Ltd, Chinese Government (100%), received approval for the acquisition of rights or interests in up to 100% of the shares of Living Earth Limited which owns or controls:

a leasehold interest in approximately 12 hectares of land at 600 Island Road, Puketutu Island; and
a leasehold interest in approximately 7.1 hectares of land at 40 Metro Place, Bromley, Christchurch.

The vendor was Forte Investments 2004 Limited, New Zealand Public (80.3%), and North American Public (19.7%); consideration was $8,801,000. The OIO states: “The Applicant’s parent-company (Beijing Capital Group Company Limited) acquired Transpacific Industries Group Finance (NZ) Limited in 2014. This included 50% of the shares in Living Earth Limited, a organic waste recycling company. The Applicant now intends to acquire the remaining 50% of the shares and considers that it will create efficiencies for Living Earth Limited as a wholly-owned subsidiary”. See our June 2014 commentary for details of the Chinese Government’s purchase of TransPacific Industries including Waste Management, and our September 2014 commentary for details of Living Earth’s original acquisition of leases at these addresses.

Schools Sell Their Forestry Holdings To Hong Kong

Kiwi Forests Investment Limited Golden World International Limited, Hong Kong (SAR, 100%), received approval for the acquisition of:

a freehold interest in approximately 818 hectares of land at Purunui Forest, Wairarapa; and
a freehold interest in approximately 816 hectares of land at Maringi Forest, Wairarapa; and
a freehold interest in approximately 732.4 hectares of land at Putinka Forest, Wairarapa.

The New Zealand vendor was Schools Amalgamated Forest Trust, Christ’s College (70%), Samuel Marsden Collegiate School Trust Board (15%), Wellington Diocesan School for Girls (Nga Tawa) Marton Board of Trustees (4.5%), St Mark’s Parish Property Trust, (3.9%), St Hilda’s Collegiate Endowment Trust Board (2.7%), Huntly School Endowment Trust Board (2.1%), St Margaret’s College Trust Board (1.5%) and Waihi School Association Inc.(0.3%); consideration was again “withheld under section 9(2)(b)(ii) of the Official Information Act”. The OIO simply states: “The Applicant is acquiring a number of forestry plantations in the Wairarapa, which it has committed to replanting once harvested”.

Alan Wood at Stuff.co.nz reports further on the deal (2/5/15): “Christ’s College, one of the country’s most expensive private schools, has sold a stake in some Wairarapa forestry blocks to the Chinese for an undisclosed sum. More than 2,000 hectares of Wairarapa forests were sold to overseas buyers, according to an Overseas Investment Office decision released this week. The sale was because nobody in New Zealand seems to be interested in buying it, according to the vendors.

“It was disclosed by Fairfax Media earlier in the year that the Schools Amalgamated Forest Trust was selling three blocks east of Masterton. The Overseas Investment Office disclosed that the blocks included an 818 hectare block at Purunui Forest, a 815ha block at Maringi Forest and a 732ha block at Putinka Forest. The consideration or sale amount was withheld under the Official Information Act. A spokesman for Land Information New Zealand said the sale information had been withheld because the ‘release of information would be likely to unreasonably prejudice the commercial position of the person who supplied or who is subject to the information’. Christ’s College owns 70% of the Schools Amalgamated Forest Trust and was contacted for comment about the sale. No comment was available by the time of publication.

“Christ’s was badly hit by the 2011 earthquakes and has had to strengthen its buildings. In 2013 the college faced an ‘unprecedented’ financial shortfall and needed millions of dollars in donations to remedy the ‘dramatic’ impact of the quakes on its heritage buildings. The College put a plea out to its more than 10,000 old boys, along with past and current parents, to raise funds. Another Christchurch school, St Margaret’s College also owns a much smaller 1.5% Forest Trust stake. Other schools with stakes include Dunedin’s St Hilda’s Collegiate School (2.7%), Samuel Marsden Collegiate (15%), Wellington Diocesan School for Girls (4.5%) and St Mark’s Parish (3.9%).

“Industry sources have said the properties were advertised ‘incredibly widely’ in New Zealand in the middle of last year before being offered to the international market. The sale was made by Schools Amalgamated Forest Trust to Hong Kong’s Golden World International, trading here as Kiwi Forests Investment Ltd, according to the OIO disclosure. Kiwi Forests has two Auckland-based directors and was incorporated in May 2011. The Hong Kong company was acquiring a number of forestry plantations in the Wairarapa, which it has committed to replant once harvested, the disclosure says.

“Wairarapa forestry consultant Stuart Orme of Woodnet said the New Zealand forestry market was competitive but it was very hard to estimate the price for the Wairarapa blocks. Remote or geographically locked blocks of forest were the lowest value. ‘There’s a lot of forests that are becoming less and less economic … certainly if they are too far away or too hard, they’re not going to get anywhere near what they thought they might have done when they planted them’. There were several groups in New Zealand buying forests and aggregating area. Another industry commentator agreed prices vary. Remote forestry land more than 100 kilometres from a port was worth about $1,000 a hectare. But well located forests might be worth more than $4,000 a hectare”.

Austrian Buys Havelock North Farm

Robert Erich Haselsteiner, Austria (100%), received approval for the acquisition of a freehold interest in approximately 486.9 hectares of land at 570 Matangi Road, Havelock North. The vendors were Andrew Desmond Orton and William Andrew Clyde Coltart, Robyn Shona Orton and Guy Donald Joseph Wellwood, New Zealand (100%); consideration was “withheld under section 9(2)(b)(ii) of the Official Information Act”. The OIO states: “The land is currently being used as a sheep and beef farm. The Applicant intends to develop and improve the farming infrastructure and operation on the land. The Applicant also intends to provide erosion control on the land (noting the proximity of the adjacent Tukituki River)”.

Patrick O’Sullivan reported on the deal prior to approval being granted (Hawkes Bay Today, 16/2/15): “A decision is still pending on the $8million sale of a 487ha farm near Havelock North because it includes the Tukituki Riverbed, which may fall into Government hands. Germany-based businessman Robert Haselsteiner applied to the Overseas Investment Office for approval last September 2. Because the title includes part of the Tukituki Riverbed, it requires extra deliberation. The farm has 2km of river frontage.

“OIO Manager Annelies McClure said the Office had an agreement in principle with Ngati Kahungunu ki Heretaunga-Tamatea ‘which provides for consultation processes with Ngati Kahungunu should the Tukituki Riverbed ever be in Crown ownership. The Overseas Investment Act 2005 requires the owner to offer that land back to the Crown’, she said. ‘The Crown can decide whether to accept the offer once the purchase has taken place. The OIO is aware of Ngati Kahungunu’s rights in relation to the Tukituki River. Because the requirement to consult with the iwi in future is guaranteed – if the riverbed ever becomes Crown-owned – there is no need for the OIO to consult with the iwi when assessing this application’.

“Neighbour Bruno Chambers said his great-great-grandfather, John Chambers, ‘wrangled’ the riverbed title along Matangi Rd in the 19th Century. ‘He had come from Australia and was concerned about water rights for the farm’, he said. The farm, part of the original Chambers landholding, was advertised as having two houses, farming infrastructure and capable of running 5,000 stock units. Mr Haselsteiner is a co-founder, with Marcus Wolsdorf, of Interhyp, an Internet-based mortgage distributor that went public in 2005. Interhyp was taken over by ING Direct in 2008, valuing the company at more than $US400million ($633 million). In 2011 the two founded investment firm HW Capital, which specialised in investments in financial services businesses. Valuer Mark Morice said the property appeared to attract a ‘considerable premium’ over and above its economic value as a farm because of its proximity to Havelock North and its scenic qualities”.

Chinese Buy Whatuwhiwhi Holiday Park

Carrington Holiday Park Jade LP, Guo Jie Gui, China, People’s Republic of (39%), and China Public (61%), received approval for the acquisition of a freehold interest in approximately 2.5 hectares of land located at Whatuwhiwhi Road, Karikari Peninsula (Whatuwhiwhi Top 10 Holiday Park). The vendor was Whatuwhiwhi Holiday Park Limited New Zealand (100%); consideration was $3,880,000. The OIO states: “The Applicant intends to develop the existing accommodation business carried out on the Land by upgrading and building additional facilities. The acquisition will allow the Applicant to develop its adjoining Carrington Resort further and provide increased offerings to the tourism market”.

Winston Peters has suggested that the park might be used to house Chinese workers bought in to work at the nearby Carrington resort, however local iwi seem less concerned. As reported by Lois Williams at RadioNZ (7/5/15): “A Far North iwi leader is dismissing fears the Chinese company expanding a luxury resort on the Karikari Peninsula will import Chinese labour to build it. Shanghai CRED Real Estate, which recently built workers’ accommodation at nearby Whatuwhiwhi, has just bought the local Top Ten Holiday Park, prompting claims it is about to bring in Chinese workers. The company – which is also the new owner of Peppers Carrington Resort – employs about 40 local people.

“Ngati Kahu Chief Executive Anahera Herbert said Shanghai CRED had told the runanga it planned to employ New Zealanders, and that the holiday park would cater for tourists on a budget. ‘I’m confident they’ll do what they told us they’ll do, and they haven’t broken their promises to us yet’, she said. ‘Mind you, our antennae are always alert, but I cannot operate on rumours or fears and the facts are they’ve been nothing but honourable and honest with us, to this point’.

“Mrs Herbert said Shanghai CRED had been more obliging than the resort’s previous American owner in resolving iwi concerns about wahi tapu, and Ngati Kahu had reached an out-of-court settlement with the company over long-standing resource consent issues. She said a Ngati Kahu delegation would travel to China next week to cement the friendly relationship as guests of the company for a cultural exchange, which would become an annual event. ‘When they came here, we moved to manaaki (look after) and mentor them to show them how we work, and how they can work with us, and now this is their way of reciprocating, to show how they work in their own land’, Mrs Herbert said. ‘And there’s the aspect of us looking for opportunities by which whanau and hapu can benefit more from what is, really, a new partnership with our new manuhiri (guests)’. The Ngati Kahu delegation to Shanghai will include Mrs Herbert; Ngati Kahu Chair Dr Margaret Mutu; four kaumatua and kuia; four young people; and several others who would pay their own way”. See our July 2013 commentary for details of Shanghai CRED Real Estate’s purchase of the Peppers resort, details of which were originally suppressed by the OIO, but then released under appeal by CAFCA.

UK Bankers Buy In Queenstown

Justin Alan Crane and Kirsty Mactaggart, United Kingdom (100%), received approval for the acquisition of a freehold interest in approximately nine hectares of land at Ellen Johnson Terrace, Lake Hayes, Queenstown; together with a 14/60th share as tenants in common in 149.2 hectares of land at Marshall Avenue, Lake Hayes, Queenstown. The vendor was Threepwood Nominees Limited, Bruce Donald Gemmell, New Zealand (100%); consideration was $2,500,000.

The OIO states: “The Applicant intends to undertake a major restoration of, and make additions to, the historic Threepwood Homestead to make it suitable as a long term residence. The Applicant also intends to fund and facilitate a wetland restoration project at Lake Hayes”. The Otago Daily Times reports further (2/6/15): “A Singapore-domiciled couple, granted approval by the Overseas Investment Office to buy the historic Threepwood Homestead, were the only applicants prepared to undertake the mammoth and expensive restoration. Documents released to the Otago Daily Times under the Official Information Act show bankers Justin Crane and wife Kirsty Mactaggart were the only party of 23 potential buyers in the past three years to make an offer for the Lake Hayes property.

“Mr Crane is the Managing Director and global head of loans, syndication and distribution for the Standard Chartered Bank Singapore, and his wife is Fidelity International’s Asia Pacific head of corporate finance and equity capital markets and corporate governance. The couple have owned a Millbrook property since 2003. Last month the ODT reported the OIO had granted consent to the couple to buy a freehold interest in about 8.95ha of land at Ellen Johnson Tce, Lake Hayes, and a share as tenants in common at 149ha at Marshall Ave, Lake Hayes, along with the homestead and associated buildings – described by the OIO as an ”historic and derelict woolshed and stables” – for $2.5 million from Bruce Gemmell. Additionally, Mr Gemmell, who acquired the property in November 2012 to on-sell it, entered into a boundary adjustment agreement with neighbouring landowner Samuel Strain, to enable the original access to the homestead, via a tree-lined avenue, to be reinstated.

“The OIO decision said the couple planned a ”major restoration of, and additions to’ the homestead. They also planned to carry out extensive landscaping, including funding restoration of adjoining wetlands, to enhance the ecological environment. The property was marketed by Sotheby’s International Realty, which received 23 direct inquiries. ‘Despite this interest, and considerable due diligence being undertaken by three of these parties, no offers other than the applicant’s were received’, the Decision said.

”According to Sotheby’s, property developers were of the view that the existing resource consents were less than ideal and that there was little to no profitability in the development … ‘Potential home buyers quickly lost interest due to substantial refurbishment costs, combined with the requirement for consents, Historic Places Trust approval, unknown quantities in the build and contamination issues relating to a sheep dip’. The property was consented for a lodge and day spa, along with a bar-restaurant. Landscape architects engaged by the couple reported the homestead and its surrounds had been neglected for about ten years.

“A 2005 conservation plan identified problems with rot and borer in the homestead, damage to the woolshed and substantial deterioration of the stables. The application met ten of the 28 relevant criteria, of which 11 were considered not relevant. It failed to meet seven criteria, including the introduction of new technology or business skills to New Zealand; added market competition, greater efficiency or productivity, or enhanced domestic services; and the introduction of additional investment for development purposes.

“The Office, however, was satisfied the couple had demonstrated financial commitment to the investment, having paid the deposit on the $2.5 million investment, and spent ‘a significant sum of money’ carrying out due diligence. It also found the benefit to New Zealand criteria was satisfied through the creation of jobs as well as protecting or enhancing the historic homestead and associated buildings. ‘In addition, the overseas investment is likely to result in other consequential benefits, such as the funding and facilitation of the restoration of a section of the Threepwood Wetland … a habitat for threatened species of native fish and swamp birds, and for a number of endemic bird species and waterfowl’. With regard to the creation of new job opportunities, or the retention of jobs, the OIO found the criteria met, with the applicant advising carpenters would work full-time on the project for 18 months, resulting in employment of those people to deal with that project and other jobs”.

Ute and Fraser Charles Partridge, German Public (50%), and United Kingdom Public (50%), received approval for the acquisition of a stratum in freehold interest in approximately 0.7 hectares of land at 210-218 Victoria Street West, Auckland.. The vendor was Victoria Quarter No. 1 Limited as trustee of the Victoria Quarter No. 1 Trust New Zealand Public (100%); consideration was $1,850,000. The OIO states: “The Applicants have recently immigrated to New Zealand and hold resident visas and intend to reside indefinitely in New Zealand. They intend to acquire the Property as a long term investment”.

And, finally for March, Pengxin Holdings (HK) Company Limited, Zhaobai Jiang, China, People’s Republic of (100%) received approval for the acquisition of the Hardinge/Victoria Street Building, Spark City, 167-169 Victoria Street West, Auckland (also known as “Building D”). The vendor was Mansons Holdings Limited, Edward Colin Manson and Family, New Zealand (100%); consideration was “withheld under section 9(2)(b)(ii) of the Official Information Act”. The OIO states: “The investment aligns with the applicant’s core focus on real estate and will allow it to continue its international growth. It will also enable the Shanghai Pengxin Group to expand and diversify its operations in New Zealand”.

Other March Decisions

Beecom (NZ) Limited Isao Mita, Japan (71%), Yasuhiro Mita, Japan (23%), Yuka Mita, Japan (3%) and Chiho Tsukada, Japan (3%), received approval for the acquisition of a freehold interest in approximately 11 hectares of land at 46 Cornish Point Road, Bannockburn, Central Otago. The vendor was Blair Linn and Estelle Jeanette Hunt, New Zealand (100%); consideration was $2,878,000. The OIO states: “The Applicant seeks consent to acquire an 11 hectare vineyard in Central Otago known as Bald Hills. Bald Hills is a boutique vineyard currently planted with seven hectares of grape vines. The Applicant plans to expand the vineyard by planting an additional two hectares of grape vines and export the majority of wine produced to overseas markets such as Japan”.

Linda Van Kempen reported on the sale in the Otago Daily Times (7/3/15): “Another Central Otago vineyard is changing hands to an overseas investor – the second this year. The sale of Bald Hills, owned by Blair and Estelle Hunt, was approved by the Overseas Investment Office this week. The 11ha Bannockburn property has been bought by a Japanese investor, who has set up a company called Beecom (NZ) Ltd. Grapes were first planted on the formerly ”rabbit-infested block of dirt” in 1997, with the Hunts following the pioneers of the industry in that region, just ahead of the ”second wave” of grape growers, Dr Hunt said yesterday. They planted 70% of the 7ha vineyard in pinot noir and the rest in riesling and pinot gris vines. The latter variety was seen as ”a bit faddish in those days”, he said. The couple had no experience in the industry aside from being ”I wouldn’t say avid, but … reasonable consumers of the product”, Dr Hunt said.

“Eighteen years later, retirement is on the agenda for the couple, who are both in their 70s, when the new owner takes over the property in a fortnight. They will shift to the Kapiti Coast to be closer to family, but admit it will be a wrench leaving Central Otago. ”Of all the places we’ve lived in our (53 years of) married life, this is the longest – 18 years – we’ve lived in one place’, Mrs Hunt said. Although they were novices when they started in the wine industry, they had excellent advisers and winemakers, they said.

“Dr Hunt’s roles over the past two decades as Telford Rural Polytechnic Chief Executive, followed by a similar role at the Otago Polytechnic’s Cromwell campus and a stint as Manager of Dunstan Hospital, all added to the business and managerial skills he brought to the vineyard. Their ”proudest moment’ as wine growers was winning two international wine awards within a week for their 2005 pinot noir. The price paid for Bald Hills was confidential, Dr Hunt said.

“The new owner planned to continue the operation. According to the New Zealand Companies Office Website, Beecom (NZ) Ltd has one director, Isao Mita, of Japan. He could not be contacted for comment yesterday. Central Otago Winegrowers Association President, James Dicey, was sorry the industry was losing the Hunts. The sale was the next phase in the evolution of the Central Otago wine industry and it was good news overseas investors were opting for properties in this district. ‘The New Zealand industry is very small industry and it needs capital, so if an overseas investor picks up the baton, I see no problem with that. It’s yet another endorsement of the work we’ve been doing to highlight this region’, Mr Dicey said. The OIO also granted consent recently for the sale of Northburn vineyard, near Cromwell, to Cloudy Bay Vineyards”.

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