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Stevenson ran 'exhaustive' tender for Lochinver, seeks capital for quarrying

Stevenson Group, the concrete, quarrying and engineering firm that owns Lochinver Station, ran an extensive tender before agreeing to sell the 13,843 hectare farm to Shanghai Pengxin and says it will reinvest the funds in other businesses.

The sale of the mega-farm near Taupo has reignited concerns about the sale of large tracts of land to foreigners, with both Conservative Party leader Colin Craig and New Zealand First leader Winston Peters making it an election issue, while the Greens want restrictions on such sales. Peters says he would block the sale if he becomes part of the next government.

Pengxin is awaiting approval from the Overseas Investment Office for what would be its largest purchase by acreage, if not by value, following its purchase of the 8,000 ha Crafar farms and a controlling stake in SFL Holdings, which bought 4,000 ha of Canterbury farms from Synlait Farms. The Stevenson family has owned Lochinver for 60 years but started as a drain-laying business in 1912, expanding into quarrying and construction in the late 1930s, and making concrete blocks from 1946. The original 5,260 ha Lochinver farm was acquired in 1958 and the family expanded to 16,595 ha "breaking the wild country into farming land" with "an enormous amount of hard work."

"Farming is not the core business of Stevenson Group," chief executive Mark Franklin told BusinessDesk. The company is freeing up capital to invest in other businesses such as expanding its Drury quarry, he said.

Franklin said the company had "really intensive discussions with lots of people both domestically and internationally. You can be very clear, anyone who was interested, I have spoken to."

While Lochinver has a rateable value of more than $70 million, the purchase price hasn't been disclosed. Still, Franklin said Pengxin's offer wasn't necessarily the highest on price alone and his company had considered a range of factors including retention of workers and the future of the property. Lochinver was more a farm enterprise than a farm. "In New Zealand a lot of people own farms but this is part of a supply chain."

He said Pengxin had a long-term strategy to build a vertically integrated business.

The value in the property was "in its ability to grow a lot of grass," which made it attractive for both dairy support and wintering stock, he said. Sheep farming was likely to remain a core part of the business.

The property was marketed by real estate firm Bayleys, which ran a 12-week international tender that closed in late February.

What do you think? Should OIO approve the sale of Lochinver Station to Shanghai Pengxin? Click here to vote in our subscriber-only business pulse poll.

(BusinessDesk)

Comments and questions
11

Would the anti sale protagonists be anti if it was to a US or European buyer? Even the local Iwi said they could not buy it. We do not have enough capital in NZ to buy our own assets as we are not a nation of savers. We are good though at borrowing to buy assets.

The Stevenson family should be allowed to sell this farm to whoever they like. They are the ones who provided the capital and broke this farm in over the years. Thus providing hundreds of jobs. Its about private land rights....the right for any individual to sell their legally owned land to the highest/best bidder. The land itself can't be "transported" offshore, it is still part of NZ and wil be forever. I for one congratulate the Stevensons for their stewardship of this fine farm and wish them well in selling it to the bidder they select!!!

Good post Bud. Also NZ will be $70mil. better off and the "farm" is still in NZ employing New Zealanders, just like before!!

Yes excellent post here!!! they cannot put this farm in plastic bags and take it away, but they can develop it further to produce profits and pay taxes and GST just like any other prospective owner and more importantly have the funding to actually pay for it which no other Kiwi can.
And to all of the naysayers on here, our richest man in NZ, spends his entire life buying up overseas!! assets, borrowing sqillions of dollars to do so, to make huge paper profits, and not a single solitary unkind word is said so it is obviously OK for him to do so but look out for anyone else.
Peters and NZ First will climb right onto this, simply because it is one huge heap of "BULLDUST" he knows it is harmless and nothing will ever happen or be done about it, but it keeps him right up there in the headlights and the large print of the media, as any headline right now is worth it's weight in GOLD!!!

I wonder how much government assistance was provided since 1956, when the current owners purchased the farm, to improve the property at tax payers expense. Huge grants and cheap loans where historically provided by central government and through regional catchment boards to improve the productivity of NZ farms.

The other issue with corporate ownership is the indefinite life of companies. Individual owners and family trusts have a built in expiry when the owners pass on or trusts get wound up which has the effect of putting the assets back on the market for future owners. Corporations do not die and do not have a limited life like trusts so the assets accumulated by corporations and companies can effectively be owned forever, never being passed down to heirs or beneficiaries. This means any property sold to an offshore entity (or NZ corporate) can be perpetually be taken off the market and never be available for future purchase by New Zealanders.

Thirdly I wonder if the Stevenson family looked at breaking the farm down into smaller sizes that might be affordable in pieces to New Zealand farmers. At $70m the size of the pool of potential purchase is very small. If there where 10 lots at $7m, or 20 lots at $3.5m this may be more affordable to kiwis and not only large inter nation investment vehicles.

I fully agree with all the comments above and it should be acknowledged that the ability of a New Zealand buyer is limited by the magnitude of the scale of this iconic property. The bureaucratic compliance issues that are a significant burden on the Rural sector in NZ eventually end up on the balance sheet of these properties and it is no surprise that it is on the desk of the OIO for consideration by an offshore investor.

Why is this property iconic?

Why should the owners be forced to sell at a lower price because of little more than emotional hysteria on the part of vociferous naysayers.

This is all the more strange as NZ has been built on the back of foreign investment and without it we would not have the quality of life we have today.

Interestingly we only get these outbursts when potential purchasers are Chinese.

Fantastic comments so far. ACT is the only party that places the utmost sanctity in private property rights; rights hard fought for but so easily lost.

It does not matter who overseas is looking to buy it. It is not a racial issue as suggested. It is core to New Zealand's future to retain land holdings. If New Zealand continues to sell then it won't be New Zealand any more will it.
The Government needs to realise that this country has more to offer than primary industry. We have an ability to provide sustainability to the world in decades to come. The Chinese clearly have realised this and know their own country can not sustain them . This is why the land grab.
As a country we need to realise we should be selling the products this country can produce and not the land itself. Value added products like our milk powder, meat cuts and technology is what we need to develop and sell and stop selling bare land.

A very logical approach to ownership and a sensible approach to ensuring that NZ has a future as NZ. To many comments here are nothing other that short term capitalistic views. When looking to the 100 year future selling land assets is not smart.

To anyone concerned that overseas investors are buying all our businesses and making all the profit, that they stop squandering their own hard earned cash on big houses and expensive cars and instead invest it into something that will secure their (and NZ's) future. This approach obviously worked well for the Stevensons, with immense benefit to the rest of NZ.