The Russian billionaire building one of the country's biggest homes in a scenic Northland bay has approval to subdivide the headland farm despite telling the Overseas Investment Office he would keep it as a single unit.

The Whangarei District Council allowed the subdivision of the headland into five lots with six building sites in 2010 at the same time as it granted consent for a beachfront lodge on the Helena Bay property.

Moscow-based steel magnate Alexander Abramov needed Government approval to buy the 215ha farm because its coastal location and size made it a sensitive purchase under our foreign ownership rules.

Mr Abramov's application to the OIO argued that selling the farm to him would benefit New Zealand in many ways - including preventing the headland being subdivided into lots as small as 20ha.


A number of development groups were seeking coastal properties to subdivide into smaller plots, the application stated.

"Rejection of the application would potentially result in the lost opportunity to have heritage sites and native bush protected and develop the brown teal habitat, while increasing the likelihood it would be subdivided."

Eighteen months after approval was granted, Mr Abramov gained permission from the Whangarei District Council to subdivide the farm into five lots. Six building sites were approved, including two in prominent positions with expansive views across the bay to Mimiwhangata, a scenic peninsula which is a conservation and marine park.

The council gave consent despite concerns raised by its consultant landscape architect that future housing could have significant impacts on the coastal environment. Council planners believed any adverse effects could be dealt with when the applicant seeks resource consent for the houses.

Mr Abramov's New Zealand agent, Chris Seel, says the subdivision is for "technical reasons" and his client has no plans to on-sell the sites. Council rules allow only one house per lot and the additional houses may be needed for farm workers or family, he says.

The property will remain in single ownership for the forseeable future.