A quiet month, which is usual for January. All the approvals are for land sales. Those for wine show an increasing tendency to vertical integration (importers taking control of the source of the wine) and/or corporatisation.
Juken Nissho Limited, owned 85% by Juken Sangyo Company Limited and 15% by Nissho Iwai Corporation, both of Japan, has approval to acquire 332 hectares at Harrison Road and Hereheretau Road, Wairoa, Gisborne for $821,250 from O Steed of Aotearoa. “The Applicant proposes to convert the subject property, which is currently utilised for agricultural purposes, into a commercial forestry operation. This will ultimately provide the Applicant with a further secure supply of wood which will be processed at its existing Gisborne processing mill. This will ensure continuity of processing and employment at the Gisborne mill and will enable future expansion of the value-added production at Gisborne. The subject property adjoins the Applicant’s Crown Forestry Licence at Pakarae Forest.” [Decision number 200310002.]
· Nobilo Vintners Limited, owned by BRL Hardy Limited of Australia, has approval to acquire 45 hectares of freehold situated at Giffords, Rapaura and Wratts Roads, Blenheim, Marlborough for $1,247,062 from David Rudd Limited of Aotearoa. “The Applicant (Nobilo) and David Rudd Limited (the vendor) have an existing business relationship under which Nobilo has provided support, business expertise and assistance to Rudd for the development of itts existing vineyard the grapes from which are supplied to Nobilo. The parties have now decided to formalise the business relationship by forming a joint venture partnership for the ownership, development and management of part of Rudd’s farm land for viticultural purposes. Whilst the Applicant is acquiring a 24.9 percent share in the joint venture, each partner will be entitled to one vote. The vendor (Rudd) has already established a vineyard on 9 hectares of the land that is proposed to be transferred to the joint venture. Rudd does not itself have the resources, expertise or the time, to further develop the property for viticulture due to its commitments to the remainder of its operations.
The proposed transaction will enable the Applicant to further expand and develop its wine making and wine marketing activities. The property will be planted in Sauvignon Blanc vines and is expected to come into full production in 2007. The proposal will enable the Applicant to make further progress to ensure the long term supply of quality grapes required to meet future sale projections, particularly in international markets. This proposal will secure additional long-term supplies of Sauvignon Blanc to meet currently unsatisfied demand in the United Kingdom and the United States. The majority of growth in New Zealand wine sales is expected to be driven from export demand, with much of the growth coming from the Marlborough region. The subject property is located in the vicinity of the Applicant’s existing vineyards and is of sufficient size to enable the Applicant to achieve economies of scale in wine production.” [Decision number 200310007.]
· Papillon Vineyards Limited, owned by Thomas Chandrasena Tenuwera of the U.K., has approval to acquire 8 hectares of freehold situated at 165 Wrekin Road, Fairhall, Blenheim, Marlborough for $583,875 from RS and CJM Young of Aotearoa. “The Applicant proposes to acquire the subject property, which is currently utilised as a lifestyle property, to establish a vineyard planted in Pinot Noir vines. The grapes produced from the property will be supplied to Highfield Estate Winery. The Applicant is a 25 percent shareholder in Highfield Estate Winery. Highfield Estate Winery is a successful wine producer that exports 85 percent of its product into overseas markets. Highfield Estate Winery requires a regular supply of high quality grapes to maintain product quality and to meet the increasing demand for its products both domestically and overseas. A consistent supply of such high quality grapes is not always available on the open market. The proposed development of the Wrekin Road property will assist in ensuring that Highfield Estate Winery will have access to premium grapes. Furthermore, Mr Tenuwera, the ultimate owner of the Applicant is currently in the process of applying for New Zealand permanent residency. He intends take up that residency once it is granted and to reside on the property.”
In November 1994 we reported that in a case of vertical integration, a Japanese/U.K. controlled company was buying a 10 hectare vineyard in Mills and Ford Road, Blenheim for $400,000. The company was Highfield Estates (1991) Ltd which “has been producing wine sourced from grapes grown by independent growers on contract to the company. Due to the greatly fluctuating grape prices over the last few years the Company has found that on a number of occasions it has been unable to source sufficient grapes at an economic price to meet its full production. The purchasing of its own vineyard will ensure that it will have a regular and steady supply of grapes required for full production with resultant benefits.” Highfield was then owned 37% by S. Yokoi of Japan, 10% by Yokoi Manufacturing of Japan, 32% by T.C. Tenuwera of the U.K. and 21% by N.S.Buchanan of Aotearoa. [Decision number 200310006.]
· Wilbur Eugene Roberts of the U.S.A. has approval to acquire 32 hectares at Renners Road and Castles Road, Lower Awatere, Marlborough for $2,770,000 from Awatere Vineyards Limited and Awatere Vineyards No. 2 Limited of Aotearoa. “The Applicant, who is experienced in the Californian viticulture industry, is a partner in a company established in 1999, VinElite Imports Inc that markets wines imported from New Zealand, Australia and France, in the United States of America. The company’s principal product lines are Mud House and LeGrys wines, produced by Mud House Wines Limited, Blenheim, of which it currently imports 5,500 cases per annum. The Applicant advises that it is expected that this volume will increase to 10,000 cases per year within three years. Mud House has insufficient fruit resources to provide this volume. The proposed acquisition by the Applicant, which will be managed by Mud House Wines, will provide an additional supply of grapes for wines for the export market. The subject property has approximately 25 hectares planted in Sauvignon Blanc by the vendor in 2001/2002.” [Decision number 200310004.]
· Lorraine Mecca and Geza Csige of the U.S.A. have approval to acquire 5.9 hectares at Aucks Road, Russell, Northland for $568,000 from K Peterson of Aotearoa. “The Applicants were granted New Zealand residence permits in November 2000, and currently hold indefinite Returning Residents Visas. They propose to acquire the subject property located near Russell and intend to reside permanently in New Zealand by September 2003 on the subject property. The Applicants are demonstrating their commitment to New Zealand by obtaining and taking up New Zealand permanent residency.” [Decision number 200310001.]
· Richard and Carmen Lynette Tredwell of the U.K. have approval to acquire 33 hectares at Langdale Road, Masterton, Wairarapa for $506,250 from RJ and SM Wendelborn of Aotearoa. “The Applicants intend to immigrate to New Zealand in March 2005 once they have completed their current employment contract with the British army. They propose initially to lease the property to a local farmer until they immigrate to New Zealand. Once residing on the property it is proposed to enhance the efficiency and productivity of the sheep and beef farming operation. In the short to medium term the Applicants are focused on the sheep and beef operation but have identified an opportunity of investigating alternative uses for the property in the long term such as deer or olives. The Applicants are demonstrating their commitment to New Zealand through applying for and taking up New Zealand permanent residency.” [Decision number 200310005.]
· Glen McBain and Deborah Jane Rose Anderson of the U.K. have approval to acquire 23 hectares at 1870 Westbank Road, Pokororo, Motueka, Nelson for $335,250 from P C Armit and W M Parker of Aotearoa. “The Applicants who are presently in New Zealand on a two year work permit and are in the process of applying for permanent residency wish to acquire the property for lifestyle purposes. They and their children intend to reside on the property.” [Decision number 200310008.]
· CabiNZ Limited, owned by the Roberts family of Japan, has approval to acquire 5.2 hectares of freehold situated at Kowai Road, Kowai Bush, Canterbury for $68,000 from KM Alliot of Aotearoa. “The Applicant’s shareholders who are in the process of applying for a Long Term Business Visa, propose to acquire the subject property to develop a small tourist accommodation and conference business for both summer and winter seasons. Using the Applicant’s shareholders knowledge the tourist lodge will be marketed in particular to Japanese tourists as well as business groups and other tourists. The development will comprise six cabins, and subject to resource consent approval, three cabins are likely to be available for business in September 2003 with the project completed by March 2005. The Applicant also intends to construct a dwelling and reside on the property. Once the accommodation business is established, the Applicant’s principal shareholder intends to apply his engineering experience and qualifications to develop a technology related business.” [Decision number 200310003.]
· Newco 1 Limited, owned by Roger Sharp of Aotearoa has approval to acquire 29 hectares at Malaghans Road, Queenstown, Otago for $1,350,000 from Christine Sharp of Aotearoa. “Roger Sharp, the beneficial owner of the Applicant, is a New Zealand citizen. Accordingly, he could have acquired the property in his own name without the need for approval but has chosen to structure the acquisition via an overseas superannuation fund for financial planning reasons. Mr Sharp, who is resident in Australia and maintains close family and business connections in New Zealand, proposes to construct a substantial dwelling on the property for his own personal use. He also intends to investigate the viability of undertaking a subdivision of the property and constructing a second house which would likely be on-sold. [Decision number 200310009.]
The value of investment approved in January 2003 is considerably lower than for the previous January, but the net value (i.e. disregarding sales from one overseas investor to another) is only a little lower. However, this is on a very low volume, as is usual in January – only nine approvals, with a gross value of $8.2 million.
Investment involving land
Gross and net sales of land approved by the OIC during January decreased substantially from the previous year. There were non refusals (see above).