After 150 years, family farm is on the market

Gwavas Station, the 1200ha Hawkes Bay farm, is now being sold. Photo / Supplied

In real estate terms, the picturesque Hawkes Bay farm known as Gwavas Station is close to unique.

The agency hired to sell the 1200ha property could, if it was so inclined, advertise the sale as "first time on the market since 1858".

Its owner, John Hudson, is a sixth-generation farmer whose family name has been attached to the land ever since it was settled by European immigrants.

But after doing his own bit to continue developing the land into one of New Zealand's premium sheep and beef farms, Hudson has decided it's time for his family to cash in at least some of its value.

Partly because high land prices have made it almost impossible to pay his siblings and his parents their share of the property, and partly because he would like to retain a share himself, he has decided to seek equity partners instead of putting the entire farm on the block.

Ideally, he would like to retain 30 per cent, and is therefore seeking investors willing to stump up at least $500,000 each for a passive stake.

The agent who is handling the offer is Steve Goodman, of Hawkes Bay agency GoodmanRural. Goodman says equity partnerships are still uncommon in agriculture, partly because investors are understandably only interested in the very best properties.

"When I was looking into equity partnerships in the Hawkes Bay, I said: 'Don't bother talking to me unless it's something special'," he says. "But this is something special."

Nevertheless, Goodman admits he has been disappointed by the lack of interest in Gwavas, which he blames on a lack of awareness, particularly among wealthy city slickers, about such opportunities.

"It's not that people are missing the bus - they're not necessarily aware the bus is even there," he suggests. Or as Hudson says: "You can't go for a ride if you don't know where the bus stop is."

Goodman notes that New Zealanders have been berated for years for putting too many of their savings into urban rental properties. He also notes the lack of listed agribusiness companies.

He is keen to point out that the New Zealand Super Fund recently made its first investment in rural property, and that there have been several high-profile sales of large farms to overseas investors in recent months.

"I think perhaps the overseas investors can see an opportunity that New Zealanders can't," he suggests.

While Goodman admits farming has been through some tough times in the past few years, he is convinced the record prices currently being achieved for meat and wool bode well for the future. And in any case, farming has traditionally managed an average return of 8 per cent per annum over time, regardless of its cyclical nature, he insists.

"If it's well capitalised, it's a pretty low risk investment. The yield is relatively low, but the capital growth is high."

While investors have been told to expect only a 3 per cent capital return on Gwavas Station in the short term, Goodman is forecasting longer term growth of more than 7 per cent.