New Zealand is recovering popularity as a destination for foreign direct investment (FDI), Overseas Investment Commission figures show.
The commission's approval is required when non-residents buy 25 per cent or more of a New Zealand company or asset worth more than $50 million.
Excluding sales from one foreign investor to
another, the net inflow of FDI approved by the commission last year was $2.8 billion.
It was an increase from $1.6 billion in 2003 and $372 million in 2002. It is the highest since $5.5 billion in 2000.
Not all the investments approved by the commission proceed but it estimates that 90 to 95 per cent do.
The biggest deal approved last year - reluctantly, Finance Minister Michael Cullen said - was Prime Infrastructure's purchase of the electricity and gas distributor Powerco.
The gross consideration was $780 million but, when sales by non-resident shareholders are excluded, the net investment into New Zealand was $692 million.
After electricity, the sectors which received the greatest net investment were manufacturing with $595 million and property and business services with $573 million.
It was the first time in more than five years that neither agriculture nor forestry was in the top three.
The biggest source of investment last year was Australia, with $2 billion of the $2.8 billion total, followed by Canada (largely a transaction associated with the restructuring of CanWest Mediaworks) and Malaysia.
The country with the largest net divestment from New Zealand was Britain, for the third year in a row.
The commission's blessing is also required when non-residents buy land over 5ha or worth more than $10 million or certain sensitive sites.
Last year, the land sales approved amounted to a net divestment by foreign owners (or buyback by New Zealanders) of 19,257ha.
That figure reflects the purchase of over 29,000ha from Fletcher Forests, which has some foreign shareholders, by the Kiwi Forests Consortium.
It approved six applications involving land that included or adjoined the foreshore.
