Ao Marama Farm, a 138 hectare Paengaroa property 19 kilometres south east of Te Puke, was bought by an existing Bay of Plenty kiwifruit grower for $5.9 million, after selling one of their smaller fully producing blocks to finance the new purchase.
Dave McLaren of PGG Wrightson Real Estate, Te Puke, marketed the property.
He said the suitability of around 80 hectares of the farm for horticulture attracted great interest.
“After some initial earthworks to the dairy block, in horticulture terms 80 hectares represents considerable scale. This land is well located relative to some of the best kiwifruit orchards in the country, has reliable water, and a good proportion of the property has soils and contours that will work well in vines.
“While as a dairy farm it milked 320 cows, producing around 110,000 kilograms of milk solids last year, once it is planted in kiwifruit it might produce more than 15,000 trays a hectare of gold G3 or 10,000 trays of Hayward green, which is a significant quantity of fruit. While it is currently worth approximately $45,000 per hectare as a dairy block, its value for kiwifruit, even simply as bare land before any development or production, is more like $100,000 to $150,000 per hectare.
“Consequently, the farm attracted strong interest, and we were able to oversee a deal that works well for both parties,” he said.
McLarensaid with prevailing trends in horticulture, other suitable Bay of Plenty dairy farms could similarly sell for conversion to kiwifruit. He was speaking to other local dairy farmers that are considering the possibility of taking advantage of the current bare land prices.
“Such sales will reward vendors generously, likely at least at double the per hectare value that purchasers would otherwise pay.
“Gold kiwifruit orchards are currently selling for more than $1 million-plus per canopy hectare. That has become established as the benchmark value for a fully developed orchard, producing at the premium level.
“While that value reflects the scarcity of such land, it also indicates the financial returns that growers can achieve on those orchards. International demand for our kiwifruit is outstanding, Zespri is in the process of issuing new licences for growers to plant G3 vines, and yet the scarcity of land is limiting the number of orchards that can be developed to capitalise on that, indicating that bare land with the right characteristics will also command a premium,” he said.
