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)