One of New Zealand's biggest privately-owned kiwifruit orchard portfolios has been placed on the market for sale.
The portfolio consists of three separate mid to large-sized productive blocks at Te Puke in the Bay of Plenty – the centre of New Zealand's kiwifruit-growing industry.
Combined, the three blocks comprise some 98 canopy hectares – on track to produce between 1.2-1.3 million trays once all in mature production, and with the potential to increase production even further.
The orchards produce both the SunGold G3 and Hayward kiwifruit varieties in roughly equal percentages of canopy. The portfolio consists of three separate kiwifruit orchards:
• Te Matai Orchard off Te Matai Road, encompassing around 56.4 canopy hectares of G3 and Hayward kiwifruit as part of a total landholding of 158.2 hectares (balance hillside grazing), with two solid residential dwellings
• Pacific Gold Orchard at 1458 Old Coach Road, encompassing around 28.05 canopy hectares of G3 kiwifruit as part of a total landholding of 38 hectares, with a state-of-the-art irrigation and frost protection system in place and
• Coachman Orchard at 1027 Old Coach Road, encompassing around 12.71 canopy hectares of G3 and Hayward kiwifruit as part of a total landholding of 27 hectares, with an irrigation and frost protection system, and a residential dwelling on a separate title.
The portfolio is being marketed for sale by Bayleys Real Estate through an international tender process – with tenders closing at 4pm on May 3.
Bayleys managing director Mike Bayley and Bayleys Tauranga horticultural sales specialist Snow Williams say it is extremely rare to see a portfolio of the Matai Pacific size come to the market,
“Kiwifruit sector and horticultural investor interest in the early phase of marketing has been unprecedented.”
Mike and Snow say the orchard portfolio being offered for sale also included the option to buy 677,720 Zespri shares - which can only be purchased and held by the owners of land which is producing kiwifruit crop sold to the co-operative.
Zespri was formed in 1997 as a grower-owned entity, and now manages the 30 per cent of the global kiwifruit trade produced in this country. In 2016/17 Zespri sold 137.7 million trays of premium-quality Zespri-branded Kiwifruit – up considerably from 82.3 million trays in the 2005/06 season.
“The sheer scale of this Te Puke portfolio puts the trio of orchards among the biggest commercial kiwifruit operations in New Zealand, and is certainly one of the largest that has ever been taken to market in one portfolio,” says Mike.
“In addition to some 98 canopy hectares there is also the potential for any new owner to develop the orchards further through grafting Hayward kiwifruit stock to the higher value G3 kiwifruit variety.”
The three properties come with substantial infrastructure, ranging from state-of-the-art irrigation and frost protection systems through to quality dwellings, along with equipment storage buildings and sheds.
Mike says potential buyers have the options of either tendering to buy the entire portfolio as one complete entity, or tendering for individual properties in any combinations.
“The economy of scale delivered by purchasing this collection of orchards, which are all in close proximity to each other, allows for any new owner to maintain the corporate approach to crop management and production,” says Mike.
“The Te Matai orchard was purchased as a ‘greenfield' site and has been fully developed and managed since its conversion from a sheep and beef farm.”
Te Matai was developed by well-known kiwifruit orchard management and development firm Edwards Heeney Consulting (EHC), whose director Tom Heeney has managed and further developed the wider Te Puke portfolio – including Pacific Gold and Coachman's orchards.
Kiwifruit is New Zealand's largest single horticultural export by both volume and value – easily eclipsing wine and apples. Kiwifruit exports accounted for $1.6 billion in sales for the year ending June 2017, with that figure expected to double by 2025.
The 2016/17 growing season saw Zespri global sales up 19 percent from the previous year on exceptionally high cropping yields. Within the kiwifruit sector, SunGold saw the sharpest increases in both volumes and value – with a tray of the furry fruit recording $8.64 in the wholesale market.
Combined, the European Union and Japan take almost half of New Zealand's export kiwifruit crop, with China our third biggest market for the crop.
Snow says New Zealand's kiwifruit industry has some 2500 commercial growers operating 3000 registered orchards on 12000 hectares of land. Of that, 4600 hectares sustained the SunGold G3 variety.
“The enormous on-going success of the SunGold G3 kiwifruit variety has come off the back of a surge in market demand which has outstripped supply. This has in turn prompted Zespri to increase the area it intended to allocate to planting this variety from 400 hectares a year to 700 hectares a year for the next five years,” says Snow.
The three Te Puke orchards being marketed for sale are all contracted to supply harvested fruit to Zespri International Limited which sells kiwifruit into more than 50 countries.
The Ministry for Primary Industries has forecast that kiwifruit exports will surge in value to $1.8 billion in 2019, largely due to the increasing popularity of SunGold G3 kiwifruit.
An economic impact and horticultural productivity report into New Zealand's kiwifruit industry produced by the University of Waikato last year stated that by 2030 the sector will generate 29,000 new jobs and inject $6.14 billion annually into the country's GDP - with much of that growth to be driven by new varieties such as G3.
Report author Dr Frank Scrimgeour from with the university's management faculty, calculated that New Zealand's kiwifruit industry would generate a 135 per cent boost in regional gross domestic product in both the Bay of Plenty and Northland regions, between 2016 and 2030.
"New (kiwifruit) varieties have proven critical to the economic viability of the industry and its ongoing contributions to the economy. Gold 3 provided a platform for sustained regional employment," Frank says in the report.