Top quality gold kiwifruit orchards are selling for double the price compared with three years ago, rural real estate agents say.
A 5.54 canopy ha Paengaroa orchard, including a house valued at $500,000 has sold for $6.7 million - or $1.1m per canopy hectare.
The news comes hard on the heels of reports from Zespri that it estimates the harvest this year would jump by 20 million trays with sales for the current season expected to be more than $2 billion.
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PGG Wrightson Real Estate Te Puke agents Chris Robb and Stan Robb sold the orchard which, in their view, had set a new benchmark.
"When gold kiwifruit orchards first started selling for $1m per hectare, right at the end of the 2016/17 season, we doubted that the market would sustain those values," Chris said.
''Now, however, we have had enough similar sales to be confident that purchasers see value at that level, and in some cases, such as this property, higher.''
The orchard had excellent shelter, ample water, a state-of-the-art frost and irrigation system and a heavy crop ready to harvest in the coming months and last season it produced 15,000 trays per ha.
Three years ago the top price for gold kiwifruit was $500,000 a canopy ha, Stan said.
''These orchards that we have been selling recently for over $1m are all situated in the same area as the one that sold for $500,000 three years ago.''
The Robb team racked up sales of more than $100m worth of kiwifruit orchards in the 2016/17 season through about 25 sales, and they sold about $70m to date in the 2017/18 season with about 15 sales.
One of those sales included a 14.29 canopy ha Paengaroa orchard developed by Baygold Limited for more than $14m, purchased by a syndicate brought together by agribusiness investor MyFarm Investments.
National country manager for Bayleys Real Estate Duncan Ross said the profitability of growing kiwifruit, along with the retail prices being achieved globally and locally, was underpinning demand for both currently productive land and potential orchard development sites in the Bay of Plenty.
In the 2016/17 year Bayleys sold $76m worth of kiwifruit orchards – encompassing some 31 individual properties.
In the year to date 2017/18 year Bayleys has sold $67.6m worth of kiwifruit orchards – with 28 properties.
There was a limitation on the availability of suitable undeveloped land for kiwifruit orchards in the region, he said.
''Factors limiting the suitability of land include access to irrigation water, and topography.
"While there is sustained interest in producing orchards we have also been in advanced discussions with a number of potential grazing and dairying block vendors throughout Bay of Plenty, Gisborne and Northland who have expressed an interest in taking their property to market as potential kiwifruit orchard or other horticulture conversions, and we expect this to continue as the search for viable growing land goes on."
Ross said the agency had received "unprecedented interest" on the three Matai Pacific, Te Puke blocks currently being marketed as part of one portfolio.
"The sheer scale of the offering hasn't been seen for quite some time, and has therefore attracted both existing operators in the region, and the investment sector looking for asset diversification in the horticultural production sector," Ross said.
New Zealand Kiwifruit Growers Inc chief executive Nikki Johnson said the high prices being paid for orchards reflects the strong growth and returns the industry was projecting over the next 10 years.
''The kiwifruit industry has rapid growth plans and projected good returns which is likely to attract new growers, expansion with existing growers and equity partnerships.''
But new growers must take into account that kiwifruit was a primary industry and had been shown to be susceptible to disruption such as Psa and the weather, she said.
New kiwifruit gold licences
• Zespri will release another 700ha of SunGold and 50ha of Organic SunGold in 2018.
• It also intends to extend the release of SunGold licence out to 2022, meaning a total of 3500 hectares would be released over the next five years.
• The median price for the SunGold licence release in 2017 was $235,000 per hectare, excluding GST.
• Zespri released 400ha of SunGold in 2016 and 400ha in 2017. In 2017 it received bids totalling 1277ha for the 400ha on offer.