CAFCA - Campaign Against Foreign Control of Aotearoa

Foreign investment in Aotearoa/New Zealand

Overseas Investment Office - February 2021 Decisions

Apex One Residential Development Gets A Fine And Retrospective Consent

Apex One Ltd (Wei Shen, China PR 70%; Guangjuan (Judy) Deng, NZ 30%) has been granted a retrospective consent for approximately 0.3342 ha. at 36A Eaglehurst Road, Ellerslie, Auckland, from Amanda Margaret Kimpton Vettoretti and Gary Michael Vettoretti for $6.15 million. The OIO states that, to meet the increased housing and non-residential use tests, the Applicant proposes removing the two existing dwellings on the land and constructing 20 new residential dwellings and five small commercial units.

The OIO considers the investment is likely to meet one or more of the increased housing outcomes; the on-selling requirement; the non-occupation requirement and also the non-residential use outcome. Consent was required because 70% of Apex One's shares are owned by an overseas person. Ms Deng, who is a New Zealander, and a director and shareholder of Apex One, entered into the sale and purchase agreement for the land with an intention to nominate Apex One Ltd as the purchaser without making the agreement conditional on consent under the Act.

The OIO is satisfied that the breach was inadvertent. On receiving legal advice that OIO consent was required, Ms Deng contacted the OIO to remedy the situation, and postponed settlement until she received an OIO decision related to another acquisition (see November 2020) that arose from a similar mistake. She has paid an administrative penalty.

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New Forests Private Equity Fund Buys 14 Forests In Nelson, Southland And Otago

Kakapo Estate Ltd and Marberry Estate Ltd has consent to acquire approximately 3,596 ha. in Nelson, Southland and Otago, made up of the Mangles, Tapawera, Alastair McKenzie, Anderson, Cam McCulloch, Christmas, Dunrobin, Monowai, Seaward Bush, Warren Conway, Whare Creek, Les Pullar, Mount Trotter and Chinook Forests from Invercargill City Forests Ltd (NZ 100%). Price withheld.

The applicants are both owned by ANZFF3 Ltd which is wholly owned by ANZFOF3 NZ Pty Ltd which is ultimately owned by The Trust Company (Australia) Ltd as trustee for the New Forests Australia New Zealand Forest Operating Fund 3 which is wholly owned by certain overseas investment funds. The Fund 3 is managed by New Forests Asset Management Pty Ltd.

The OIO states that the consent was granted under the special test for forestry activities in s.16A(4) of the Act. The land being acquired is made up of 14 existing commercial forests, totalling 3,029 ha. in forestry, approximately 500 ha. of native vegetation, 50 ha. of unplantable ridges, gullies and steep land, and 18.23 ha. of roads and tracks. The applicants intend to continue operating land as commercial forests, and replant following harvest. They will continue existing arrangements for the forests, including public access over the Monowai Forest by the University of Otago Geology Department. The Minister of Finance determined that the investment was not contrary to NZ's national interest.

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Kingheim Undertakes Three More Forestry Conversions, In Waitomo, Waikato And Huntly

Kingheim Ltd (Austria 50%; Ireland 50%) has consent to acquire approximately 566.46 hectares of land at 12 State Highway 3 (Main St), Mahoenui, Waitomo, from Ian Mark and Ruth Gale Coleman (NZ 100%). Price withheld. The OIO states that Kingheim applied for all three consents under the special test for forestry activities in s.16A(4) of the Act. It has had forestry investments in NZ since 2012. The vendors used the Mahoenui land for breeding and finishing sheep and cattle. Kingheim intends to develop a commercial forest and plant principally in Californian Coast Redwoods, with small areas of oak, walnut and alder trees.

Approximately 390 ha will be planted, with the remainder unplanted, including native bush (154 ha), buffer land (6.5 ha), and roads and tracks (three ha). They will subdivide and sell a portion of the land with a dwelling that is not required for forestry activities. They intend planting to commence from 2022/23 with the redwoods harvested in 30-50 years. Approximately 443 ha is Land Use Capability (LUC) classes 6, 7 and 8, which is generally considered more suitable for forestry. Part of the land is LUC 4 (86 ha) and LUC 2 (32 ha), which is generally suitable for a broader range of land uses.

Kingheim Ltd (Austria 50%; Ireland 50%) has consent to acquire approximately 516.2895 ha. at 232 Ngapaenga Road, Pomarangai, Waikato, from Andrew Scott Pease, Heather Mary Pease and Laurence Edwin Rau (NZ 100%). Price withheld. The OIO states that this land at Pomarangi was also used for breeding and finishing sheep and cattle and will be developed into a commercial forest, principally Californian Coast Redwoods, with small areas of oak, walnut and alder trees.

Approximately 430 ha. will be planted, with 54 ha retained in native bush and 12 ha buffer land and two ha roads and tracks. Kingheim will subdivide and sell a portion of land with a dwelling that is not required for forestry activities. Planting will commence from 2024/25 and the redwoods will be harvested in approximately 30 to 50 years. 512 ha is Land Use Capability (LUC) classes 6 and 7, which is generally considered more suitable for forestry.

Kingheim Ltd (Austria 50%; Ireland 50%) has consent to acquire approximately 394 ha. at 4382 State Highway 22, Pepe, Huntly from Winston Farms Ltd (NZ 100%). Price withheld. The OIO states that this land was a sheep and beef unit, which Kingheim intends to develop into a commercial forest, principally in Californian Coast Redwoods, with some small areas of oak, walnut and alder trees. It plans to plant approximately 330 ha. with the remainder being unplanted areas associated with forestry activities, retained native bush (26 ha), buffer land (seven ha), and roads and tracks (two ha).

It plans to subdivide and sell a portion with a dwelling that is not required for forestry activities. Planting is intended to commence from 2023/24 and the redwoods will be harvested in 30 to 50 years. The majority of this Land in Land Use Capability (LUC) class 6 (approximately 361 ha), which is generally considered more suitable for forestry.

In April 2012 Kingheim got consent for four forestry conversions at Whangamomona, Taranaki, on the gorgeous "Hidden Highway", despite local opposition. Eight years later, locals are saying it has shown no benefits for their community (Deena Coster, 22/2/20) and was "changing the landscape by stealth".

Unsurprisingly, the applicants have kept a low media profile. In 2012, an NZ Forestry Ltd spokesperson said the unnamed owner of Kingheim was working to obtain NZ citizenship for himself and his family (Stuff 1/6/12). Kingheim Ltd was registered in NZ in 2011, with shares held by Kingtal Nominees Ltd (initially Magsley Nominees), also NZ registered in 2011, with shares held by two Directors in Auckland. There are no companies under these names in the UK, Eire or Austrian registers.

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Drylandcarbon Buys Two Forests In Kaikoura And In South Wairarapa

Drylandcarbon One Limited Partnership(NZ Public 59.7%; Australian Public 14.4%; US Public 14.1%; various 11.8%) has consent to acquire 1,319.2665 ha. at 42 Wiffens Road, Kekerengu, Kaikoura (Matiawa Forest), from Matiawa Ltd (NZ 100%). Price $4.5 million. The OIO states that the consent was granted under the special test for forestry in s.16A(4) of the Act. 872 hectares are currently used for sheep and beef breeding.

Drylandcarbon will plant approximately 850 ha. as a commercial rotation forest; the remainder is 170 ha. of native bush and 299 ha. in riparian strips, reverting scrub and bush, a small exotic plantation and buildings and yards. If assessed as safe and habitable, the dwellings on the land will only be used for forestry worker accommodation, in line with the requirements of the Act. Drylandcarbon will continue existing arrangements including public access for the School of Geography, Environment and Earth Sciences, Victoria University. It intends to harvest the existing crop of trees and replant.

Drylandcarbon One Limited Partnership (NZ Public 59.7%; Australian Public 14.4%; US Public 14.1%; various 11.8%) has consent to acquire 302.59 ha. at Whakatomotomo Road, Pirinoa, South Wairarapa, from Guy Stuart Didsbury, Andrea Dorothy Didsbury and Timothy David White as Trustees for the Guy Didsbury Family Trust (NZ 100%) for $1.4 million.

The OIO states that the consent was granted under the special test for forestry in s.16A(4) of the Act. The land is currently used as a grazing and finishing operation (223 ha.), the remainder being 26 hectares of existing radiata pine forest and 54 ha. of reverting scrub. Drylandcarbon plans to harvest the existing crop of trees and replant. It plans to plant approximately 214 hectares as a commercial rotation forest.

A further nine hectares will be planted dependent on obtaining resource consent, or will otherwise be left to revert. Drylandcarbon has a significant NZ ownership including the Crown through shareholdings in its limited partners Air New Zealand, Z Energy, Contact Energy and Genesis Energy. See previous OIO consents for Drylandcarbon in November 2019, January, February (2), May and November 2020.

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KDL Group/Meraki Resources Buys Papakorokoro Forest In Gisborne

Forestate Gisborne Holdings 2018 Ltd (Canada 100%) has consent to acquire approximately 287 ha. at Ngakoroa Road, Gisborne (Papakorokoro Forest), from Forestate Gisborne Management Ltd (Canada 100%) for $960,000. The OIO states that this is the applicant's first investment in NZ but its parent company KDL Group has extensive forestry interests in Canada.

The land is currently used for forestry by an overseas person, and the applicant intends to continue using it for forestry (as required by s.16A(4)). It will enter into a forest management agreement with a NZ-based forestry manager. Approximately 240 ha. will continue as exotic forest, with the remainder being infrastructure, bush, streams, etc. Forestate will maintain existing arrangements, including a management plan for falcon and bats, and provide public access through a permit system.

KDL Group is a British Columbian logging company that began in 1975 trucking logs in Fort St James, then grew nationally and diversified into mechanical repair and civil construction. In October 2020 it renamed itself Meraki Resources. Forestate Gisborne Management was registered in 1994, with KDL's founder as one of the directors, when it bought the forestry rights for this property, and then bought the land itself (Eve's Forest) for $100 in 1999 - see consents of July 1994 and June 1998.

The holding company was registered in April 2020; both are overseas Non-ASIC companies. ("There are two types of overseas companies that are allowed to register in New Zealand: ASIC [Australian Securities and Investments Commission] - which is the term used for Australian companies. Non-ASIC - which captures Companies from the rest of the world", New Zealand Companies Office).

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Cloudy Bay/Diageo/LVMT Buys Another Marlborough Vineyard

Cloudy Bay Vineyards Ltd (UK 34%; France 66%) has consent to acquire approximately 11.77 ha. at 128 Bedford Road, Renwick, Marlborough, from Bedford Estate Wines Ltd (NZ 100%). Price withheld. The OIO states that Cloudy Bay is an established NZ winemaker, well-known for sauvignon blanc which is approximately 78% of its output and of which 98% is exported.

Cloudy Bay is ultimately 66% owned by LVMH Moöt Hennessy Louis Vuitton SA, a transnational luxury brand conglomerate, and 34% owned by Diageo plc, a United-Kingdom based alcohol beverage company. The land adjoins one of its existing vineyards and is currently planted in chardonnay vines (4.98 ha.) and sauvignon blanc vines (5.09 ha.).

It plans to replant 1.19 ha. chardonnay vines with sauvignon blanc at a higher vine density and apply labour-intensive harvesting techniques, introducing additional development investment. Its track record of wine production and global distribution networks will assist it to command a premium overseas as compared to average NZ sauvignon blanc prices. See April and December 2014, June 2015, November 2016 and July 2020 for other Cloudy Bay acquisitions and background on its Big Alcohol owners.

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Mitsui Fudosan Buys Hastings Vineyard For Table Grapes

GreenCollar NZ Ltd (Japan 68.6%; USA 10.9%; UK 10.3%; various 4%; Luxembourg 2%; Belgium 1.2%; Hong Kong 1%; China PR 1%; Netherlands 0.9%) has consent to acquire approximately 9.4 ha. at 1999 Maraekakaho Road, Raukawa, Hastings, from Hamish Richard McKay, Mary Veronica McKay and Mary Patricia Herd as trustees of the McKay Family Trust (NZ 100%) for $2.5 million.

The OIO states that GreenCollar is a subsidiary of Japanese real estate developer Mitsui Fudosan Co., Ltd, which is listed on the Tokyo Stock Exchange. The land is currently used to grow wine grapes and as a lifestyle property. GreenCollar intends converting to Japanese table grapes of the violet king, shine muscat, and yu ho varieties. The stated benefits to NZ are additional investment, eight new permanent and 30 new temporary full-time jobs, a more productive land use and increased export receipts.

GreenCollar NZ was registered in January 2020. New Zealand grapes enable GreenCollar/Mitsui Fudosan to market all-year-round grapes directly to Japanese restaurants as part of a "new farming lifestyle for the coming age". Mitsui Fudosan is a major real estate developer in Japan, and a core company of the Mitsui Group. It is listed on the Tokyo Exchange and Nikkei 225, revenue about $NZ23.6 million in 2019 (Wikipedia).

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Datamars Animal Technology Expands Its Capital Base

Datamars Investors S.à r.l. (Canada 31.8%; US 21.7%; UK 17.3%; Luxembourg 6.5%; Germany 6.1%; France 4.5%; Switzerland 4.1%; various 8%) has consent to acquire 100% of the shares in Datamars Holding S.à r.l. from Datamars Investments S.à r.l. (Canada 65.1%; US 13.7%; Luxembourg 9.1%; UK 8.7%; Switzerland 1.6%; Cayman Islands 1%; Spain 0.8%). Price withheld.

The OIO states that Datamars Investors was formed to acquire Datamars Holding, a holding company for the Datamars Group, a leading global precision animal management solutions platform. Datamars supplies its customers with integrated livestock solutions across livestock identification and monitoring, farm resource management and animal health delivery systems, and high-performance identification (and reunification) solutions for the pet and textile markets.

The transaction is a restructuring to bring in new investors. This is an international transaction upstream of the NZ subsidiary, Datamars Ltd, with no direct changes in ownership or control of the NZ assets of Datamars Group. This transaction required a mandatory "national interest" assessment under s.20A of the Act due to the involvement of a non-NZ Government investor (a long-term institutional fund manager created by a special act of the Legislature of the Province of Québec) that will retain a more than 25% ownership interest in sensitive business assets.

Tru-Test began in 1964 with milk flow meters and became a New Zealand-based world leader in agritechnology including milk metering equipment, electric fencing and livestock scales, dairy automation, milk cooling and farm holding tanks. See commentaries of November 2016 and September 2018 for its takeover by first Kestral Capital, then Datamars.

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Evolution/PEP Buys Bupa Property In Gisborne

Evolution Rehab Ltd has consent to acquire the following residential (but not otherwise sensitive) land for incidental residential use:

  • a cross-lease interest in flats 3, 4, 5 and 6 at 505 Aberdeen Road, Te Hapara, Gisborne, comprising a 4/6th freehold share in approximately 0.2206 ha. and a leasehold interest in the flats;
  • approximately 0.5492 ha. freehold at 505 Aberdeen Road, Te Hapara, Gisborne; and
  • a lease of approximately 0.1403 ha. at 18-20 Chadlington Ave, Henderson, Auckland.
The vendor is Bupa Care Services NZ Ltd; price withheld.

The OIO states that Evolution Rehab is an NZ registered company ultimately wholly owned by Pacific Healthcare HoldCo Ltd, which is owned by overseas investment funds managed and/or advised by Pacific Equity Partners Pty Ltd (PEP), an Australian private equity fund manager, its affiliates and certain NZ- and Australia-based management shareholders. One of Pacific Healthcare HoldCo's group of companies is in private healthcare, including providing facilities and patient care. Evolution Rehab is acquiring the Bupa property to provide patient accommodation and rehabilitation services.

The OIO considers this is likely to meet the incidental residential use test:

  • likely to be used for residential purposes but only in support of the relevant business (which is not in the business of using land for residential purposes); and
  • acquired in the ordinary course of the business of the applicant.

That strange bit of language about "incidental residence" is one of the cute tricks whereby overseas owners of retirement and care villages get to be treated like owners of hotels (i.e., temporary accommodation) and not like property companies, thus avoiding both capital gains tax and the new requirement for residential property to be owned by NZ citizens or permanent residents only.

See December 2020 for a previous Evolution Rehab consent and March 2019 for when Pacific Healthcare bought Evolution. Pacific Equity Partners will be a very familiar name to CAFCA members - just use the search engine on our Website to see pages of past consents. I don't know why this OIO summary doesn't even try to tell us the nationalities of the investors who now own this NZ property.

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UAE And Australian Private Equity Buys Te Anau Holiday Park

Tasman Tourism NZ Ltd UAE 90%; Australia 10%) has consent to acquire 1.5575 ha. at 128 Te Anau Terrace, Te Anau, from Getaway Te Anau Ltd (NZ 100%). Price withheld. The OIO states that Tasman Tourism is a joint venture between an Australian private equity firm (with experience in the holiday park industry) and an investment company based in Abu Dhabi.

It intends to develop the holiday park over five years, including rebuilding, refurbishing, and upgrading the existing accommodation, as well as developing services, amenities, and park infrastructure. This part of a broader strategy to acquire, develop and operate a portfolio of New Zealand holiday parks offering tourism services to domestic and international visitors. The applicant plans additional capital expenditure on development.

The likely flow-on effects are stated to include jobs, improved domestic services, increased export receipts (once borders reopen), and will advance the Government's tourist strategy. The Minister of Finance has determined that the investment is not contrary to New Zealand's national interest and is subject to risk mitigation conditions. The OIO doesn't tell us what those risks and mitigations are.

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