October 19, 2015

U.S. investors surpassed Chinese investors, buying the most New Zealand dairy land in 2013 and 2014.

Over the two years, through five separate transactions, U.S. investors bought 15,404 hectares of dairy land at a total cost of $78.9 million. However, over the same time period New Zealand’s Overseas Investment Office (IOI) granted approval for only one Chinese purchase by Synlait Farms (now Purata), which bought 11 farms totaling 3,305 hectares.

The total number of New Zealand dairy hectares bought by overseas investors from all countries totaled 28,312 at a cost of $297 million, according to analysis by the firm, KPMG, but the purchase price was not disclosed for a number of these transactions. The buyers hailed from 12 different countries along with one category under the description, ‘various overseas’ which did not specify a single country.

Some investors have been reticent to buy into New Zealand’s dairy sector over concerns that the only available exit would be to sell to Chinese or Hong Kong investors, however, the numbers indicate that the market is much more diverse.

"There is a widespread perception that it's a thin market – comprised of Chinese and Hong Kong investors – who are buying New Zealand dairy land. In reality, though, the market has a broad base of investors," said KPMG partner, Justin Ensor.

Based on the land area purchased, the top investors were from the U.S. and China, but these were followed by Sweden, New Zealand companies with foreign partners, the UK, Canada, Switzerland, and Italy. By value, U.S. investors spent the most on New Zealand dairy land spending $78.9 million, followed by Chinese investors who spent $63 million. These were followed by New Zealand investors who spent $32.7 million and UK investors who spent $32.1 million.