Foreign investment in Aotearoa/New Zealand
Overseas Investment Office – October 2016 Decisions
New Forests Investment Fund Buying Up Marlborough Forests
Blenheim Estate Ltd, the Trustee Company (Australia) Ltd, a trustee for the wholly overseas-owned New Forests Australia New Zealand Forest Operating Fund 2, is acquiring commercial forestry in Marlborough, totalling 4,974 hectares. It will supply a local mill for a minimum of ten years, and implement measures as recommended by the Department of Conservation and the Walking Access Commission. The consideration was withheld under s.9(2)(b)(ii) of the Official Information Act (likely to unreasonably prejudice commercial interest of person supplying the information).
This portfolio comprises:
- 2,078.9988 hectares at Benredwood Forest, 672 Avon Valley Road, Waihopai Valley, Marlborough;
- 248.6231 hectares at Willow Creek Forest and Big Green Forest, Marlborough;
- 41.3900 hectares at Koromiko Freehold Forest, 973 SH 1, Koromiko, Marlborough;
- 153.1800 hectares at Hidden Valley Forest, Marlborough;
- 602.2900 hectares at Branch Forest, near 5969 State Highway 63, Wairau Valley, Marlborough;
- 1,848.9300 hectares of land at Chestnut Valley Forest, Marlborough.
The “local mill” referred to above is no doubt the sawmilling assets included in the Koromiko purchase from Flight Group, which are now owned by Timberlink, an Australian timber products processor that is also a New Forests investee company. Sydney-based New Forests has three forestry investment funds, operating across Australia, NZ, the US and Asia (as the role of governments in forestry declines). Its assets total $A3 billion. It has subsidiaries marketing eco-products, Australian hardwoods and carbon offsets, and an eye to the future in biomass and bio-materials.
This Marlborough purchase tops the 3,842 hectares of Wairarapa forestry already purchased in 2016 by New Forests as Wairarapa Estate Ltd (see February 2016 Decisions). In June 2015, New Forests acquired a 4,000 hectare forestry management right in the Hautu-Rangipo region near Turangi (Taupo Estate Ltd).
This plantation is part of an 8,500 hectare purchase of Crown land in a settlement that sees the return of Tūwharetoa whenua. New Forest’s acquisition of the right was a back-to-back deal involving Hautu-Rangipo Whenau Ltd, a newly formed Tūwharetoa Limited Partnership that includes two major Tūwharetoa forestry trusts, Tūwharetoa farm trusts, and a collective hapū entity.
New Forests’ interest in New Zealand is made clear in their Investment Outlook 2015-2019: in 2014, New Zealand was the largest supplier of softwood logs to China, accounting for 32% of supply. Around half New Zealand’s forests remain in institutional (State/iwi) ownership, but foreign investment and management companies are increasingly targeting the New Zealand softwood forests in private hands. As New Forests’ tells clients, forestry is a stable long-term investment that grows – not just through export and processing profits, but biologically.
Aus/China/NZ Group Begins Buying Forest In Porirua
This is another example. United Forestry Group Ltd (Australia 35%, China 35%, NZ 30%) is acquiring a freehold interest in approx. 382 hectares of forest land tucked behind 314 Flightys Road, Pauatahanui, Porirua, known as Fernhill Forest. United Forestry says it currently has no forestry operations in New Zealand but plans to buy and consolidate forest land and cutting rights from small-scale owners in the southern North Island and the northern South Island, and to manage and operate those forests as a single forest estate.
They see this purchase as an important first step in progressing this business plan. Consideration was $4,249,817. The vendor is NZSF Timber Investments (No. 3) Ltd, an Auckland-based public investor founded in 2005. This vendor was previously involved in the sale of the NZ Superannuation Fund’s forestry block to Chinese interests (see Decisions March 2013).
Other Foreigner Funds Shuffle Shares In Our Forests
The Manufacturers Life Insurance Company (70% Canadian, 20% US) owns 32.6% of Taumata Plantations Ltd and with this consent acquires a further 7.99%, bringing its share to 40.59%. The seller is HSBC Nominees on behalf of two Palisade’s Diversified Infrastructure funds (Australian 92%; Asian 7.3%). OIO consent is required if the value of the assets is more than $100m. These assets are:
- freehold interest in approx. 111,094 hectares of sensitive forest land; and
- leasehold interest in approx. 40,790 hectares of sensitive forest land.
Unisuper Ltd (100% Australian) owns 14.09% of Taumata and is increasing its share to 25.9%, buying from Taumata. Unisuper is Australia’s fifth largest superannuation fund, providing services to employees in the higher education and research sector. In both Decisions, consideration was withheld under s(9)(2)(b)(ii) of the Official Information Act.
Taumata Plantations is a New Zealand forestry company incorporated in 2006 to acquire Carter Holt Harvey’s New Zealand forest estate. Today, it has a total forest estate of 189,126 hectares across New Zealand, including rights to forests on Maori land. It is a holding entity for foreign insurance and investment funds managed by Hancock Forestry Management (NZ), as are Tiaki Plantations and Tasman Bay Forests. Hancock Forestry Management (NZ) is a unit of US-based Hancock Natural Resource Group, established here in 2004 and now the largest owner or manager of planted forests in New Zealand. It exports New Zealand logs to China, Japan, Korea and India.
As Murray Horton noted in 2015, Taumata racked up collective tax losses of $595.5m since 2006, with accumulated tax benefits of $126m (“Dodge City: The Transnationals’ Favourite Place To Do Business”, in Watchdog 138, April 2015; see also Decisions re Taumata for October 2006 and March 2009).
Zhaobai Jiang Acquires More Of Gulf Harbour
Top Harbour Ltd owns or controls a freehold interest in approx. 22 hectares of land at Gulf Harbour, Whangaparoa Peninsula, Auckland. This is already 45% owned by New Wish Investment Ltd (Rose Jiang, Canada 50%; Zhaobai Jiang, People’s Republic of China 50%) which is now acquiring full ownership through two transactions; one with Shanghai Zendai Real Property Limited (Hong Kong), the other with Westlake Investment Ltd (Terry Lee & family, NZ).
The land is currently being developed into an “integrated coastal community” which is “likely to result in the retention of existing jobs, and the creation of new ones, increased availability of housing in the wider Auckland region and the planting of native plants”. Consideration was $25,539,611.
Zhaobai Jiang is the Chinese tycoon behind the company that bid for the Crafar farms. In 2012 Gulf Harbour was bought out of receivership by Jiang, Shanghai Zendai, and Westlake Investments (with major losses to Allied Farmers Investments, NZ, now NZ Farmers Livestock Ltd, and Bank of Scotland International). The purchase was arranged through Top Harbour Ltd, a New Zealand company set up by Auckland businessman Terry Lee, a close associate of Jiang.
At this time Top Harbour acquired 31ha of undeveloped land, mostly zoned for residential development with some commercial development possible along a harbourside strip known as Hobbs Wharf (Greg.Ninness, “Chinese Buyer For Gulf Harbour”, Sunday Star Times 17/6/12. See also OIO Decisions August 2012).
Chinese Buy Origin Energy’s Rimu Oil And Gas Well, South Taranaki
WestSide NZ Ltd (China 100%) is buying leasehold and/or freehold interest in approx.15ha of land at Mokoia Road, Mokoia, which is the site of the Rimu oil and gas production facility, between Hawera and Patea in South Taranaki. Westside will continue to use and develop the existing business to increase production of oil and gas from the Station and associated assets. The vendor is Origin Energy Resources (Rimu) Ltd (Australia public 30%, US public 8%, Asian public 5%, UK public 5%, NZ public 0.31%, various overseas 42.69%).
Consideration was $10 million. The Australian energy giant Origin Energy is selling out its conventional oil and gas business to focus on energy markets and the liquified natural gas (LNG) business.
Consortium Leases Public Land For Pūhoi Rd Of National Party Significance
NX2 Consortium (ACCIONA Spain 10%, ACC NZ 38%, Public Infrastructure Partners II LP NZ 38.3%, Fletcher Bldg 13.4%) is leasing approx. 1,700 hectares of land from NZ Transport Agency, for the purpose of constructing and maintaining the Pūhoi to Warkworth Road. The consideration for the lease was in excess of $100,000,000. NX2 was chosen by the NZ Transport Agency as the preferred bidder, in a Public Private Partnership (PPP) whereby the applicant will be required to:
- design, construct and finance the Pūhoi to Warkworth road (this is expected to take approximately five years); and
- once the road is completed, manage and maintain the road for a 25-year term.
The Pūhoi to Warkworth project extends the four-lane State Highway 1 by 18.5km, from the Johnstone’s Hill tunnels to just north of Warkworth. It is the first stage of the Ara Tūhono–Pūhoi to Wellsford Road of National Significance, seen by the National government as key to unlocking New Zealand economic growth. Doubt if our $100,000,000 will be spent in the North, but we may spend a little more getting there ourselves. In May 2015, the NZ Transport Agency said no decision had been made on tolling this route but if it should be, the Transport Agency would retain responsibility for tolling. So, a public face on private profits.
The first PPP-built State highway, currently under construction, is Transmission Gully in Wellington. NZ Transport Agency boasts that Transmission Gully was named by two international finance publications as the “2014 Asia-Pacific PPP Deal of the Year” (see also Bill Rosenberg on Public Private Partnerships: What And Why”, in Watchdog 136, September 2014).
Chinese Buy Tirohia Landfill
Waste Management NZ Ltd (50.5291% owned by the Chinese government; 49.4809% China public) has bought a freehold interest in approx. 185 hectares of land in the Hauraki Plains, being the Tirohia Landfill. This is a recycling and waste management company, which provides “environmental services to industrial, municipal and commercial customers throughout New Zealand. It proposes to increase efficiency through increased capture of greenhouse gas and its conversion to electricity. The increase of gas capture will also reduce greenhouse gas emissions and the development of an improved gas capture network will require the introduction of capital into New Zealand”.
It claims its previous investments in New Zealand have resulted in the creation of jobs, increase of gas capture and introduction of capital. The vendor is the Leach family; consideration was $15,340,000. This company may be collecting your bin and renting you a skip. From its Website, it is enthusiastically greenie and Kiwi as. Since 2006 the Companies Office register has a Beijing Capital Waste Management NZ Ltd, and at the same address plain old Waste Management with just one Chinese director; both held by Beijing Capital Group. Well, there’s money in muck anywhere.
Bolt Holes In NZ?
Chinese Migrant Subdivision In Silverdale
Zhaoxi Lu, director and sole shareholder of Diamond Wheel Ltd (China 100%), intends to migrate and reside in New Zealand indefinitely. He currently owns 24.5% of the units in Hawken Lane Development LP and seeks to increase his ownership to 45.5%, involving freehold interest of approx. 11 hectares of land at 3-4 Jack Hawken Lane, Silverdale, Auckland. Hawken Lane Development LP is undertaking a large-scale subdivision project. The vendor is Kaha Management Limited as trustee of the Kaha Investment Trust (Cho Kin Wong and family, NZ 100%). Consideration was $7,280,000
Russian Buys In Matakana
Leonid Kiryakov (Russia) intends to migrate and reside in New Zealand and is acquiring a freehold interest in approx. five hectares of land at 230 Whitmore Rd, Matakana for $4,950,000. The seller is the JV Bourke Family Trust (NZ).
Austrian Former Tennis Star Buys In Russell
Thomas Muster (Austria) is acquiring freehold interest in approx. 37 hectares of land at Long Beach Road, Russell for a consideration of $5,650,000 from the SGA Edwards Trust (NZ). He intends to use the land as a holiday/life style residence, including an extensive ecological programme to restore native vegetation on the land and the creation of enduring legal public walking access around the coastline.
Muster was a 1990s’ international tennis star, winning several major tournaments and achieving the global Number 1 ranking (Note that he paid $5.6 million for the land, not the $56m cited in this Stuff article).
Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258
Christchurch.