Kiwifruit orchard sale sets $1m per hectare record

A gold kiwifruit orchard has sold for $1 million per hectare at Te Puke. Photo/Supplied

The sale of a Te Puke gold kiwifruit orchard has set a new record, fetching $1 million per hectare.

The property was one of two big kiwifruit orchard sales in Te Puke this month.

Professionals Katikati/Te Puna agent Jeff Barbour brokered the deal for the sale of the two gold kiwifruit blocks that were ''exceptional and a cut above your normal offering''.

Located on Mangaweka Rd, one of the 5.6ha lots sold for $5.6m to a farmer while the other, a $3.85ha property with a basic house on it, fetched $4m and was sold to a local grower.

Mr Barbour said last year the orchard gate returns on the orchards were between $150,000 to $160,000 which was ''very high''.

Meanwhile, demand for orchards continued to outstrip supply, he said.

Simon Anderson, chief executive of Realty Services, which operates Bayleys and Eves Realty, said he was not surprised with the levels people were willing to pay at the moment for kiwifruit orchards, given the high demand.

''It's no surprise to get $1m a hectare for gold as it is highly sought after. You are talking top locations and quality orchards and like any real estate that is what is required to hit those peak numbers.''

Returns on kiwifruit were good and a lack of orchards for sale was helping drive up prices, he said.

''There is also a fair bit of cash around looking for an investment of this type . . . and it's a very mature industry as far as infrastructure and management goes. If you want to be an absentee owner you can do that quite easily as you can put in pretty experienced operators in to run them and it's very cost effective to do that.''

There was a lot of interest in gold and green orchards, he said.

New Zealand Kiwifruit Growers chief executive Nikki Johnson said while the market value placed on some orchards was high, ''it does reflect the strong growth that the industry is currently experiencing''.

The industry was susceptible to various factors, she said.

''Investors must take into account that kiwifruit is a primary industry and has been shown to be susceptible to negative surprises such as Psa and the weather.''

Zespri grower and external relations general manager Dave Courtney said Zespri's March 2017 forecast was for strong grower returns in the 2017/18 season.

The gold kiwifruit orchard gate return was $8.75 to $9.75 per tray and $105,000 to $120,000 per hectare while green was $5.15 to $6.15 per tray and $47,500 to $57,000 per hectare.

Mr Courtney also said the Zespri Board had indicated it would release 400ha of SunGold NZ licence each year for the next three seasons, subject to an annual review of performance after each selling season.

''The kiwifruit industry is set for strong growth, on track to more than double sales to $4.5 billion by 2025. However, all primary industries are vulnerable to threats posed by weather and biosecurity, and growers need to carefully consider potential risks when making their investment decisions. ''

Reinz figures showed from December 2016 to May this year 30 kiwifruit orchards sold for a total value of $69.9m.

A spokeswoman said during that timeframe no orchard had sold for $1m per hectare.