Capital Markets: Election slowdown suspected in OIO lag

Chinese company Shanghai Pengxin's confidential bid to buy Lochinver Station in the central North Island was leaked during last year's election campaign and was quickly denounced as a "tragedy" by New Zealand First. Photo / Dean Purcell

Foreign investors, primed-up to buy significant New Zealand commercial assets, are having to sit tight while the Overseas Investment Office (OIO) clears a backlog of applications.

The long waiting periods are frustrating.

Not just to the prospective foreign buyers who face mounting holding costs. But also to sellers wanting to realise assets.

There is also a strong suspicion that some delays are due to the approvals process being slowed down by last year's election campaign where ministers would have been loath to sign off sensitive deals until the new Government was resolved.

The most significant application that has yet to be finalised is Chinese company Shanghai Pengxin's bid to buy the 13,843 hectare Lochinver Station in the central North Island.

Pengxin's confidential bid was leaked during last year's election campaign and was quickly denounced as a "tragedy" and "madness" by New Zealand First and the Conservatives.

If Pengxin gains OIO approval and the deal is signed off by Chinese authorities it will be the second-biggest sale of NZ farmland to a foreign owner by value and one of the biggest by area.

The OIO sent its final recommendation on Pengxin's application to Associate Finance Minister Paula Bennett and Land Information Minister Louise Upston in early April. Bennett said on TVNZ's Q+A programme that the issues were complex.

What wasn't complex however was Wilmar and First Pacific's takeover bid for Australian breads and spreads maker Goodman Fielder which has significant New Zealand operations.

First NZ Capital's Christopher Simcock points out that even the Chinese authorities cleared the bid ahead of NZ's Overseas Investment Office.

Australia's Foreign Investment Review Board (FIRB) and its consumer watchdog also got their approvals in ahead of the NZ regulatory signoff.