Big Te Puke kiwifruit orchard portfolio

7:07 PM Tuesday March 27, 2018 True Commercial

Te Matai Orchard off Te Matai Rd. Photo / Supplied

One of New Zealand’s biggest privately-owned kiwifruit orchard portfolios has been placed on the market for sale.

The portfolio consists of three separate mid to large-sized productive blocks at Te Puke in the Bay of Plenty — the centre of New Zealand’s highly lucrative kiwifruit-growing industry.

Combined, the three blocks comprise about 98 canopy hectares — on track to produce between 1.2m to 1.3 million trays once all in mature production, and with the potential to increase production even further.

The orchards produce both the SunGold G3 and Hayward kiwifruit varieties in roughly equal percentages of canopy.

The portfolio consists of three separate kiwifruit orchards:

  1. Te Matai Orchard off Te Matai Rd, encompassing about 56.4 canopy hectares of G3 and Hayward kiwifruit as part of a total landholding of 158.2ha (balance hillside grazing), with two solid residential dwellings;
  2. Pacific Gold Orchard at 1458 Old Coach Rd, encompassing about 28.05 canopy ha of G3 kiwifruit as part of a total landholding of 38ha, with a state-of-the-art irrigation and frost protection system in place; and
  3. Coachman Orchard at 1027 Old Coach Rd, encompassing about 12.71 canopy ha of G3 and Hayward kiwifruit as part of a total landholding of 27ha, with an irrigation and frost protection system, and a residential dwelling on a separate title.

The portfolio is being marketed for sale by Bayleys Real Estate through an international tender process closing at 4pm on May 3.

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Pacific Gold Orchard at 1458 Old Coach Rd. Photo / Supplied

Bayleys managing director, Mike Bayley, and Bayleys Tauranga horticultural sales specialist, Snow Williams, say it is extremely rare to see a portfolio of the Matai Pacific size come to the market,

“Kiwifruit sector and horticultural investor interest in the early phase of marketing has been unprecedented,” they say.

Bayley and Williams say the orchard portfolio being offered for sale also includes the option to buy 677,720 Zespri shares — which can only be purchased and held by the owners of land that is producing kiwifruit crop sold to the co-operative.

Zespri was formed in 1997 as a grower-owned entity, and now manages the 30 per cent of the global kiwifruit trade produced in this country. In 2016/17 Zespri sold 137.7m trays of premium-quality Zespri-branded Kiwifruit — up considerably from 82.3m trays in the 2005/06 season.

“The sheer scale of this Te Puke portfolio puts the trio of orchards among the biggest commercial kiwifruit operations in New Zealand, and is certainly one of the largest that has ever been taken to market in one portfolio,” Bayley says.

“In addition to some 98 canopy hectares there is also the potential for any new owner to develop the orchards further through grafting Hayward kiwifruit stock to the higher value G3 kiwifruit variety.”

The three properties come with substantial infrastructure — ranging from state-of-the-art irrigation and frost protection systems through to quality dwellings, along with equipment storage buildings and sheds.

Bayley says potential buyers had the options of either tendering to buy the entire portfolio as one complete entity, or tendering for individual properties in any combinations.

“The economy of scale delivered by purchasing this collection of orchards, which are all close to each other, allows for any new owner to maintain the corporate approach to crop management and production,” Bayley says.

“The Te Matai orchard was purchased as a ‘greenfield’ site and has been fully developed and managed since its conversion from a sheep and beef farm.”

Te Matai was developed by well-known kiwifruit orchard management and development firm Edwards Heeney Consulting (EHC), whose director Tom Heeney has managed and further developed the wider Te Puke portfolio — including Pacific Gold and Coachman’s orchards.

Kiwifruit is New Zealand’s largest single horticultural export by both volume and value — easily eclipsing wine and apples.

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Coachman Orchard at 1027 Old Coach Rd. Photo / Supplied

Kiwifruit exports accounted for $1.6 billion in sales for the year ending June 2017, with that figure expected to double by 2025.

The 2016/17 growing season saw Zespri global sales up 19 per cent from the previous year on exceptionally high cropping yields.

Within the kiwifruit sector, SunGold saw the sharpest increases in both volumes and value — with a tray of the furry fruit recording $8.64 in the wholesale market.

Combined, the European Union and Japan take almost half of New Zealand’s export kiwifruit crop, with China our third biggest market for the crop.

Williams says New Zealand’s kiwifruit industry has 2500 commercial growers operating 3000 registered orchards on 12,000ha of land. Of that, 4600ha sustains the SunGold G3 variety.

“The enormous on-going success of the SunGold G3 kiwifruit variety has come off the back of a surge in market demand that has outstripped supply.

“This has in turn prompted Zespri to increase the area it intends to allocate to planting this variety from 400 hectares a year to 700 hectares a year for the next five years, “ Williams says.

The three Te Puke orchards for sale are all contracted to supply harvested fruit to Zespri International Limited which sells kiwifruit into more than 50 countries.

The Ministry for Primary Industries has forecast that kiwifruit exports will surge in value to $1.8b in 2019, largely due to the increasing popularity of SunGold G3 kiwifruit.

An economic impact and horticultural productivity report into New Zealand’s kiwifruit industry produced by the University of Waikato last year stated that by 2030 the sector would generate 29,000 new jobs and inject $6.14b annually into the country’s GDP — with much of that growth to be driven by new varieties such as G3.

Report author Dr Frank Scrimgeour from with the university’s management faculty, calculated that New Zealand’s kiwifruit industry would generate a 135 per cent boost in regional gross domestic product (GDP) in both the Bay of Plenty and Northland regions, between 2016 and 2030.

“New varieties have proven critical to the economic viability of the industry and its ongoing contributions to the economy.

“Gold 3 provided a platform for sustained regional employment,” Scrimgeour says in the report.