Feds uneasy about Lochinver sale to Chinese

Federated Farmers says it is concerned the sale of Lochinver Station to Shanghai Pengxin Group may not provide sufficient benefit to New Zealand.

“Federated Farmers is, frankly, uneasy about the potential sale of Lochinver Station to Shanghai Pengxin,” according to Dr William Rolleston, Federated Farmers president.

“New Zealand absolutely needs foreign investment but it has to be of benefit to the local and national economy. 

Dr Rolleston says that, given the location of these farms to Shanghai Pengxin’s other landholdings, it will increase speculation that vertical integration by way of processing could be on the cards. 

“In December 2010, the government tightened the rules around foreign ownership by way of an economic interests factor in the Overseas Investment Office’s consideration. This allows ministers to consider whether New Zealand’s economic interests are adequately safeguarded and promoted in the case of land aggregation or vertical integration.

“Considering Lochinver Station on its own is three times the land aggregation trigger level, let alone when added to the former CraFarms, this will be a test of the OIO’s rules.

“Last year, Federated Farmers wrote to ministers requesting research into the extent of overseas investment in farmland. We understand ministers were concerned at the potential cost but the economic price of getting foreign investment rules wrong outweighs this. 

“The reality is that no one knows how much of our farmland or housing is foreign owned.”

The 13,800ha Lochinver Station near Taupo was placed for tender by Stevenson Group, which has owned it for more than half a century. 

Stevenson Group says it will use the funds to invest in a quarry development at Drury.

Lochinver is one of the largest rural runs in the country, with a rateable value of $70.6 million. 

Bayleys was the marketer and expected the sale price to exceed the biggest farm transactions undertaken in the past five years – including St James Station in Canterbury for $45 million; a rural Dipton property in Southland that sold for $33 million; and Mt Pember Station in North Canterbury, which sold for close to $30 million. 

Lochinver is on the Rangitaiki Plains, 32km from Taupo and 92km from Napier. It is a sheep and beef breeding and finishing and dairy support station with three airstrips, a lake, a recreational hunting block, 22 houses, which accommodate the families of 20 permanent staff, a staff recreation centre, a school, 91km of well-formed pumice roads, six cattle yards, three woolsheds and other farm buildings. 

Last week Pure 100 Farm, a local subsidiary of Shanghai Pengxin Group, signed the sale and purchase agreement for Lochinver Station for $74 million.

The Central Plateau farm acquisition is now before the Overseas Investment Office and will then go through the Chinese regulatory approval process before settlement.

The group currently owns 16 farms in the North Island. In March this year, it also secured a 74% of 13 farms in the South Island.

Shanghai Pengxin says its philosophy is to work co-operatively through its local subsidiaries within the New Zealand farming industry and support new investment and innovative opportunities, as well as productivity enhancement, sustainable farming practices, and building supply chain capability.

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