Farm investment specialist Craigmore Sustainables said it would spend $38 million on converting 137 hectares of established dairy farm land near Kerikeri to what will be one of the country's biggest kiwifruit orchards.
The company is New Zealand-owned but draws its funds from overseas, mostly from Europe, which meant the purchase required Overseas Investment Office (OIO) approval.
Funds are sourced from Europe, UK and Ireland, with over 50 per cent now coming from Germany. Investors typically had an interest in the sustainability of New Zealand's food and fibre sectors.
Craigmore said the investment would increase local kiwifruit production by more than a third and create 29 fulltime-equivalent jobs.
The move follows recent approval from the OIO for Craigmore to buy land in Hawke's Bay and Gisborne, where the company is investing $52m in apple orchard development.
Chief executive Che Charteris said the investments were part of the company' s "permanent crop" business, which is expanding and diversifying horticultural developments in to key central and northern regions.
Craigmore had in the past bought about 1,000 ha of pastoral land over the last couple of years conversion to horticulture.
"The land use change generates approximately 10 times the jobs and exports per hectare with a lower environmental footprint," he told the Herald.
About 70 ha of 137 ha Kerikeri property will be used for kiwifruit, with the remainder to be used for environmental protection and biodiversity enhancement, he said.
"New Zealand's horticulture sector is a world leader in many areas, with exports growing at seven per cent per annum for the past 20 years, bringing with it increased regional development and employment," Charteris said in a statement.
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Charteris said access to capital is a barrier to realising the full potential of horticulture.
Through its permanent crop partnership, Craigmore is building over $200m of horticultural businesses, with a large number being orchard conversions from pastoral land, he said.
"New Zealand has vast areas of land that are well suited to grazing livestock, but there are also some areas that should be converted to horticulture and forestry," he said.
Craigmore still has around $50m to allocate and is for minority investments in existing horticultural businesses.
There will riparian planting in areas around the orchards, with indigenous plant species, to provide a buffer to waterways from sediment, nutrients and other runoff and to provide corridors for wildlife movement, Charteris said.
Rural real estate experts say land use is changing, particularly in the North Island, and often at the expense of dairy, as land owners seek higher returns.
Dairy conversions have come to a standstill in most parts of the country, and some dairy farms have reverted to their original use or have gone over to a different use.
Craigmore was established in 2008 by Forbes Elworthy and Mark Cox.
The company manages a mix of dairy, grazing, forestry and horticultural properties spread throughout the country and covering more than 15,000 hectares.