Green light for kiwifruit boosts orchard sales

DESIRABLE: Values for well-located green kiwifruit orchards increased about 30 per cent in the past six months.

Record forecast prices for green kiwifruit have driven up horticulture property sales in the Western Bay of Plenty.

Tauranga PGG Wrightson Real Estate salesman Stan Robb says confidence in the industry is rebounding.

Values for well-located green kiwifruit orchards increased 30 per cent in the past six months and by 100 per cent since spring last year, he said.

"Even at the present benchmark price of $230,000 per canopy hectare, a 15 per cent return on investment appears achievable with a high-producing green kiwifruit orchard.

"Since Psa hit gold kiwifruit varieties harder, prices for those orchards are lagging, though these are now also on the rebound and by Christmas new variety gold orchards with a good crop on may command up to $300,000 per canopy hectare," Robb says.

"Once crops are set, in early 2014, prices for both green and gold kiwifruit land could accelerate still further."

Bayleys Country manager Simon Anderson says: "There is not a great number of sales yet but certainly buyers are looking and the demand is strong for kiwifruit.

"I think it's fantastic and a reflection of the industry - the sort of skilled management involved in it and the way they have adapted to the change in environment with Psa."

Anderson says investors have renewed interest. Portfolios in kiwifruit are looking more attractive, returns are good, and it is almost like a "mini eclipse" as recent demand for dairy farms has also pushed property prices to a premium.

Kiwifruit Growers president Neil Trebilco says the forecast return for green kiwifruit is the highest it has been in almost 10 years at $5 a tray and it looks like the industry is well on the way to recovery from Psa. "We have been through a period of a year when we were most likely to see Psa expressing itself and there has been a lot less Psa on orchards this year compared with last year so growers are obviously becoming a lot more positive."

However, Trebilco says caution is needed as kiwifruit orchards are still at risk.

"Our industry structure means we have weathered the Psa storm very well, more than you would have otherwise expected.

"We anticipate the volumes will increase and they will increase in gold kiwifruit the coming year and more dramatically in 2015.

"It is encouraging when 18 months ago some orchards were selling for the equivalent of bare land price and now orchard prices are back to where they were pre-Psa and that speaks for how far the industry has come."

Real Estate Institute figures show that in October six Western Bay of Plenty horticulture properties sold compared with none for the same period last year.

In October this year, eight farms sold in the Western Bay of Plenty compared to none in October last year.