Real Estate

Rural market update

Why would we not back our Hill Country farmers to make the best long-term choices?

As a company, Property Brokers has stood back from the debate on forestry, carbon, and pastoral farming; when it comes to selling rural real estate, it always pays to stay on task with the job at hand. Currently, however, concern in rural communities continues to ramp that unless the government policymakers intervene, vast tracts of rural land will be lost to pine trees and foreign interests, noting foreign interests are, in fact, excluded from carbon-only sales (permanent forests). This year has been a significant season for hill country sales; many stations have been selling at 2-3 times their value on five years ago, particularly on the East Coast of the North Island. Our company alone has sold over 50,000 hectares of rural real estate this last season, and over 10,000 hectares of that has gone to alternative land use, including carbon farming in the North Island specifically. The policy debate has morphed now into permanent forests vs production forests, with exotics and specifically Pinus Radiata being singled out to be excluded from future ETS registration under the definition of a permanent forest.

Many in our farming community will see this as a win, should this be confirmed, and certainly meantime, “carbon only” buying interest for large stations has all but evaporated ahead of pending Central Government announcements. Potentially problem solved.

We’d agree a permanent exotic forest that includes Radiata in the first instance is flawed and that the focus on Radiata should be on production forestry. However, the definition of a “production forest” in the NZ psyche is very much influenced by the short rotation nature of our production forestry of the last 30 years. This is quite unique to NZ, given our latitude and coastal climate. We can grow Radiata in half the time compared to most other regions across the globe. The option to harvest has typically been influenced by the market for wood and the economics of extraction; however, Radiata doesn’t stop growing in value at 30 years. In fact, future NZ production forestry, combined with potential windfall gains from the ETS and seemingly unlimited access to foreign capital, may well extend some production rotation lengths out to 50 years. It’s hard to see the reign of production forestry winding down anytime soon. This is where the real debate around land use needs to focus. NZ Hill Country is almost by definition LUC 6 and 7 land, and this land use classification dominates the descriptions noted in published Overseas Investment Office (OIO) decisions, favouring foreign-owned production forestry. The East Coast of the North Island enjoys the strongest production forestry demand for post-1989 clear pastoral land of anywhere in the country. This demand has far more to do with the proximity to the port and coastal altitude than the favourable slope. The East Coast has endured decades of weather, wreaking erosion havoc. Clearly, any notion that production forestry can’t operate on steep classes of land use is not reflected in current sales or OIO decisions. Long story short, NZ production forestry is a $6b dollar export earner and stands to benefit significantly from current and future ETS settings. NZ production forests have an exceptional international competitive advantage in growing timber. Pinus Radiata can sequester carbon faster than just about any other species, and NZ has been learning how to grow it for over 100 years. Many farmers have already started to look at options to integrate forestry with their pastoral farming enterprises. Looking back 30 years, forestry rewards for farmers have been mixed, given production log prices never lived up to the hype of the early 1990s. Today, however, the ability to generate carbon returns early in the production cycle is a significant hedge compared to times past. This probably explains the 47,000 ha of land registered for planting within existing farms, between 2018 and December 2020, under various government schemes. Of this area, 12,000 ha was identified for manuka/indigenous planting (Beef & Lamb August 2021). Our forestry sector has underpinned hill country land values for the last 30 years, and while carbon-only interests in recent seasons have paid the premiums, production forestry, by contrast, is no plant and run scheme and continues to offer real options for many farmers. There is nothing stopping production forestry from being harvested in 50 years, particularly given our ETS has the potential to offset establishment costs and generate a revenue stream. Current arguments about the distance to port and extraction costs need to be balanced against the reality that we could be talking about many, many decades from today, before harvest. Not to mention the option of it becoming a future renewable energy source.

The opportunity for farmers to create an asset within an asset has never been more real, enabling options to hedge environmental emissions whilst at the same time creating an intergenerational asset.

Production forests have the scope to potentially create opportunities to deal with family farm succession challenges through a combination of cutting rights long term and carbon assets in the short term. If there was one take-home message for our hill country farmers, it would be that sequestering carbon on their land is currently a significant property right, and to have no plan for it or, worse still, have a legitimate property right legislated away is selling our pastoral sector short. Exotic production forests integrated within farm systems owned by NZ farmers should be the current policy focus. This would mitigate the current policy reliance on OIO decisions that drive whole farm sales to foreign buyers; production Forestry will continue to accelerate with or without farmer involvement. Permanent forests are a policy illusion and unlikely to run the intended course, particularly when carbon values revert to zero in the decades ahead. For our part, we continue to see a partnership between farming and production forestry as the best hedge for a world desperately seeking renewable construction materials. Hill Country has been on the wrong side of land-use change for a long time now; we actively support policy and conversation that drive better outcomes for farmers, their land and the associated property rights that go with it.

Conrad Wilkshire, GM Rural for Property Brokers Ltd conrad@pb.co.nz

Tiraumea 50 and 132 Puketawa Road

Tender

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PB053815

Hyde 9101 Hyde-Middlemarch Road

Quality in Hyde - "Craighurst"

We offer for sale this excellent Hyde property which is well located at the base of the Rock and Pillar Range within easy travelling distance to Dunedin City and Central Otago. The 1,370 ha is made up of approximately 300 ha of paddocks with the balance being excellent hill blocks. High quality improvements include modern well presented 4-bedroom family home, second separate home, 5-stand near new woolshed and covered yards, as well as numerous farm buildings. Currently wintering 2500 half-bred ewes, 620 half-bred hoggets, 40 breeding cows, 130 R1 mixed sex cattle, 50 R2 mixed sex cattle and rams. Properties such as Craighurst seldom come available. Call Ray to view - you will be impressed.

For Sale $5,500,000 + GST (if any) View By appointment Web pb.co.nz/DNR12950

Puketawa - 40 ha and Balmoral - 49 ha

Located in the farming district of Tiraumea and centrally located to Pahiatua, Pongaroa & Masterton is Puketawa and Balmoral, originally parts of a larger scale breeding & finishing properties. The two portions of 40 ha and 49 ha subject to survey has a mix of easy to medium hills and over 20 ha of flats in improved pastures, both portions are well subdivided by a mix of conventional & electric fencing. The improvements are of a high standard. Puketawa portion includes a four stand woolshed with a covered yard facility, an impressive 4 bedroom plus office homestead with spa room & pool, an older cottage & large implement shed. Balmoral features dual road frontage, dagging shed & sheep yards.

Tender closes 2.00pm, Tue 19th Jul, 2022, to be submitted to Property Brokers, 129 Main Street, Pahiatua View By appointment Web pb.co.nz/PR103445

Jared Brock

M 027 449 5496

Hyde 540 Four Mile Road

Large scale farming in Otago

This very good sheep and beef farm is a quality breeding and finishing property located in the heart of Otago. The 2029ha consists of flat and rolling paddocks plus oversown tussock blocks, providing the property with a great balance. 'Mt Highlay' is currently running approximately 8500 SU with predominantly crossbred sheep and angus/hereford beef cattle. The quality of the livestock give testament of the high quality of the property. Improvements include 4-bedroom home, 5-stand woolshed and covered yards, plus numerous farm buildings. An additional 584ha neighboring property is available for lease providing additional production. Please contact Ray to arrange a viewing.

For Sale $9,000,000 + GST (if any) View By appointment Web pb.co.nz/DNR10449

Warkworth Matthew Road

Developer, lifestyler, weekender!

With resource consent granted for up to 29 lots, spectacular 360-degree panoramic farmland and sea views, and plenty of outdoor activities make this 320-hectare block a rare find. This unique property is secluded and private, yet only a short drive from the ever-popular Warkworth and Matakana townships and an easy commute to Auckland CBD. An extensive driveway system provides access to the multiple building sites, and a multitude of off-road tracks for adventures on horseback or motorbike to every corner of the property, including through the large stands of mature Kauri and stunning waterfalls.

Take a virtual tour: vimeo.com/714991181 (turn on your sound)

bayleys.co.nz/1203070

320ha

Tender (unless sold prior)

Closing 4pm, Wed 29 Jun 2022 41 Queen Street, Warkworth View by appointment John Barnett 021 790 393 john.barnett@bayleys.co.nz

MACKYS REAL ESTATE LTD, BAYLEYS, LICENSED UNDER THE REA ACT 2008

Boundary lines are indicative only

Opotiki 31 Clark Cross Road

Kiwifruit, kiwifruit, kiwifruit

Opotiki, perhaps the highest producing district. With 1.47 canopy hectares of G3 and 1.76 canopy hectares of Hayward kiwifruit, they dont get much better than this production orchard. Vendor motivation is high, thus a hefty price reduction - his loss is your gain - do the maths on this one, put your own stamp on it and take every opportunity it has. This could and will be another one of the Bay of Plenty's best. Priced for a quick sale, reduced to $3,450,000 plus GST (if any). The sale does not include 2022 crop proceeds. bayleys.co.nz/2502632

Boundary lines are indicative only

4.9887ha

Asking Price $3,450,000 + GST (if any) View 10-11am Tue 21 Jun or by appointment Snow Williams 027 275 5500 snow.williams@bayleys.co.nz

SUCCESS REALTY LIMITED, BAYLEYS, LICENSED UNDER THE REA ACT 2008

Waipapa 460 Pungaere Road Rotongaro 568 and 616 Hetherington Road

Large scale beef farm

This well-developed 203.68ha (more or less) property, features volcanic soils and has good scale and is held within four titles. The land is of an easy to rolling contour and is currently utilised as a bull farm, with stock numbers comprising of 400 mixed age bulls. This versatile block is surrounded by lifestyle blocks, horticulture and dairy farms, making it ideally suited for a variety of farming, business, horticulture or lifestyle uses. Improvements include a three-bedroom home, four bay implement shed, disused cowshed, cattle yards and Kerikeri Irrigation water supply. The property borders Lake Manuwai and is located only five minutes from Waipapa and 12 minutes to Kerikeri.

bayleys.co.nz/1003061 4 1 2

Set Sale Date (unless sold prior)

4pm, Wed 13 Jul 2022 62 Kerikeri Road, Kerikeri View by appointment Craig De Goldi 027 287 7544 craig.degoldi@bayleys.co.nz

MACKYS REAL ESTATE LTD, BAYLEYS, LICENSED UNDER THE REA ACT 2008

Golden early season opportunity

Rarely does an opportunity present itself to secure such a strategic farming investment so early in a season. Encompassing 106 hectares (more or less) in three titles. The farm is currently run as a OAD operation with last seasons production being 85,111kgMS. Supplying Fonterra the tidy 22 ASHB is complete with modern plant and is supported by a large feed pad. The farm is well catered for with quality infrastructure including a two-bay shed, calfshed, two haybarns, yards, and loading races all centrally located. Predominantly two and three-wire electric fencing subdivide the farm and flank the extensive laneway system. The four-bedroom character home has recently been extensively refurbished and boasts modern appliances and double glazing.

bayleys.co.nz/2313502 106ha 4 1

Auction (unless sold prior)

11am, Thu 28 Jul 2022 96 Ulster Street, Hamilton View 11am-12pm Wed 22 Jun Karl Davis 0508 83 83 83 karl.davis@bayleys.co.nz Peter Kelly 027 432 4278 peter.kelly@bayleys.co.nz

SUCCESS REALTY LIMITED, BAYLEYS, LICENSED UNDER THE REA ACT 2008

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