South Island farms fetching top prices
Dairy farms in the South Island are fetching over $50,000/ha, a sign that the sector is rebounding.
The final five properties, in Atiamuri and Tokoroa sold by tender in late June.
Paul O'Sullivan, PGG Wrightson Real Estate sales manager for Rotorua, Taupo and South Waikato, marketed the farms, which was a process that took four years in total. He says the properties attracted a range of buyers.
Trinity Lands Limited, a company of local farmers, bought three of the final group of five farms, taking its total purchases of the former Carter Holt Harvey properties to 15. Another significant purchaser was Southern Pastoral, which numbers former All Black captain Graham Mourie among its directors and is 99% owned by a Swedish state pension fund. Southern Pastoral acquired 10 of the farms; individuals purchased the rest.
According to O'Sullivan, the five properties that went unconditional in June, which range in size from 333 to 708 hectares and all have modern residences, machinery and roading, achieved a total sale value of $31.5 million.
"Offering so many farms for sale has had an impact on the market. Between last December and this June, the median bareland price for Waikato dairy properties was $26,000 per hectare, whereas in earlier times it has been around $34,000," he says.
"Availability of so many farms for sale has been positive for buyers. However, with the final property from this portfolio now sold, similar farms are scarce and it is likely that values will firm in the coming months," he said.
Conversion of the Carter Holt Harvey properties from forestry to dairy created approximately 200 new jobs and brought 99 new families to the district, which has had a significant effect on the two colleges and seven primary schools in and around Tokoroa. Totalling 8600 hectares, the 30 converted forestry properties sold for over $200 million.
Meanwhile, a smaller portfolio of South Waikato farms, owned by Contact Energy, is also finding ready buyers. No longer required by the electricity generator after its development of the Te Mihi geothermal power plant, six properties covering a total of 1000 hectares, all within 15 kilometres of Taupo, have also been marketed by PGG Wrightson Real Estate.
O'Sullivan says four of the farms, ranging from 100 to 200 hectares, have sold for a total of $4.4 million, and he is preparing to offer two more to the market.
