New Zealand’s Massive Farm Collection Seeks $140 Million

South Island stations expected to attract wealthy investors.

A sprawling 14,600-hectare property in New Zealand’s South Island, comprising three integrated stations and 58 freehold titles, has hit the market. The substantial scale of the Southern Farm Collection of Lone Star Farms is projected to fetch around $140 million, potentially excluding most individual buyers.

Prime Farmland Available

Located in Otago, the stations are being offered as a rare opportunity to acquire one of the country’s largest sheep and cattle operations. According to Russell Reddell, an agent with New Zealand Sotheby’s International Realty Queenstown, the properties were once 16 individual farms.

The collection includes Caberfeidh in the Hakataramea Valley, The Wandle in Middlemarch, and Barewood, located between Outram and Middlemarch. Reddell noted that assembling an operation of this magnitude typically takes decades.

He also noted that the properties have garnered significant interest both domestically and internationally. However, “The scale and the price point of this rule out about 99% of people in general.”

Ideal Investor Profile

Reddell anticipates that the buyer will likely be a wealth fund, an agriculture-related business, or a high-net-worth individual or family office aiming to diversify their portfolio. As of June 2024, global assets under management in alternative investments, such as farmland, reached $13.32 trillion (Preqin).

The tender for the stations is set to close in November. Furthermore, Reddell expects to see at least a half-dozen serious contenders, despite the fact that deals of this size can take years to finalize.

Overseas buyers will be subject to Overseas Investment Office approval. This requirement gives local buyers a competitive edge. Reddell stated that the interest from New Zealand has primarily come from high-net-worth individuals.

The stations were valued at approximately $113 million, with an additional $17 million in stock and $3 million in plants and equipment. Reddell emphasized that high country stations rarely come on the market.

While the primary focus remains on sheep and beef production, Reddell suggested that alternative land uses are also feasible.

Other High Country Stations Available

Anthony Morsinkhof of Forbes Global noted that he has four high country stations on the market in New Zealand, generally ranging from $20 million to $50 million. Manuka Point Station, another property listed publicly, features a luxury lodge nestled in the New Zealand Alps.

Although it has been on the market since October 2023, Morsinkhof stated that stations often take up to seven years to sell due to the OIO approval process and accessibility challenges.

According to Morsinkhof, Americans and North Europeans have shown interest, along with offshore funds that often consider these properties for land-banking. Singapore and Dubai-based funds are also actively seeking large land holdings in New Zealand.

Additionally, Morsinkhof argues that the OIO process can be unfair, as farmers with more than five hectares must advertise in New Zealand before selling to foreigners, while commercial property owners face no such requirement.

Ruth Hodges, managing director of Colliers’ Otago and Southland rural business, also has high country station listings, including Matangi Station, and Branch Creek Station.

Hodges noted that overseas buyers may find it difficult to obtain OIO approval and prove the “benefit to New Zealand” test. Properties come to market for various reasons, including family succession challenges or the owner’s desire to retire from an isolated lifestyle.