Hawke's Bay kiwifruit farm sells for $40.2mn

New Zealand's kiwifruit industry continues to surge ahead and a recent orchard sale underscores confidence in the sector.

A 66-hectare kiwifruit orchard in the Hawke's Bay area recently sold for $40.2 million, something PGG Wrightson Real Estate general manager Peter Newbold said was unusual.

"Not many of this size come on the market. Kiwifruit orchards normally sell in the hundreds of thousands or single-digit millions," he said.

Just over six years ago, New Zealand's Kiwifruit sector was decimated by a bacterial disease called PSA-V or Pseudomonas syringae pv. Actinidiae. Zespri International, which controls exports of New Zealand's Kiwifruit, has instead focused on marketing and developing gold varieties that have proven to be more resistant to the diseases. That strategy is now paying dividends with the latest season marked by record sales and the highest ever grower returns. Total sales revenue for the 2015-16 season was $1.9 billion, up 22% on the year.

Mr Newbold said the orchard sale attracted overseas interest and there were a number of genuine inquiries and solid tender offers. The orchard was sold to the Ngai Tukairangi Trust, which already has kiwifruit interests. The trust was not immediately available for comment.

The property, which grows SunGold kiwifruit, sold for $700,000 per canopy hectare and Mr Newbold said more upside might be possible. He said the price per canopy hectare had risen from around $400,000 two years ago.

"The returns are driving the per canopy rate and I think there's a good future at the moment. Without overdoing it, we think demand will continue," he said.

Late last year, Zespri announced it would sell licences for another 400ha of the SunGold variety in 2017, with a further 400ha to be released in 2018, 2019 and 2020, subject to the product's performance and global demand.

Mr Newbold noted people are more confident about kiwifruit and "the whole horticulture space is in good stride."

Fruit was New Zealand's fourth-largest export in the 12 months ending November.

(BusinessDesk)