Rural property syndicator MyFarm said low interest rates, falling yields on listed shares and tenancy pressures after the Covid-19 pandemic are stoking interest in horticultural assets.
Over the past 11 months, Kiwi investors have bought $129 million of horticultural assets in 10 investments offered by MyFarm. More than $57m of that has been invested since March, the company said.
Chief executive Andrew Watters said the main interest had come from more than 300 investors in six SunGold kiwifruit orchards making up $61m of the total asset base. The remainder of investment went into a hop garden development and three vineyard purchases.
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"Investors have increasingly been seeking out real assets to supplement their returns in the face of declining interest rates and dividend yields from listed stocks," Watters said.
"The trend of wholesale investors considering high-returning horticulture assets has been building, but it has gathered pace following Covid-19," he said.
"Mainstream investments – bank deposits and the share market, are delivering lower cash returns and tenancy risks with commercial property are now apparent," he said.
"By contrast, horticultural assets are generally performing very well as the world continues to pay very good prices for tasty and high nutrition value New Zealand products."
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The Real Estate Institute of NZ, in its rural property report for May, said there had been a big lift in horticultural sales in the Bay of Plenty. Leading the way was the sale of a large kiwifruit orchard at Paengaroa at just under $12m.
New Zealand kiwifruit marketer Zespri has promoted SunGold as a source of high vitamin C, which has seen them increase projected returns three times this season.
Zespri's current forecast of $10.50 to $12/tray is well in excess of their long-term price range of $8 to $10 a tray.
Zespri said this month that returns direct to the New Zealand industry increased by 8 per cent year on year to $1.96 billion in the 2019/20 year.
The average green per tray return increased to $6.67, and the average per hectare return for green reached a record high of $67,295.
The SunGold average return per tray increased to $11.86 and the average return per hectare was also a record $161,660.
Zespri's net profit after tax was $200.8m, up from $179.8m in 2018/19.