A new benchmark has been reached for premium gold kiwifruit orchards after a handful sold in the Bay of Plenty for an average of $2 million per canopy hectare.
Agents spoken to by NZME agreed the previous record was $1.8m and interest on high-quality gold orchards was ''extreme'' as orchard gate returns (OGR) remain high.
Last week, Dave McLaren from PGG Wrightson Real Estate sold a 21.26ha, fully producing Pukehina gold kiwifruit to an orchardist investment group for $38m.
McLaren said the sale attracted ''intense interest'' with at least half a dozen tenders, all at a similar level.
The property was originally on the market as two separate adjoining titles but the vendor preferred to sell the orchard as a single entity.
''The market at the moment is very buoyant and it's running hot. It is the perfect time to purchase an orchard with the imminent harvest ... however to get these price heights orchards have to tick all the boxes.
''This particular block was also completely covered in wind cloth which is quite unique.''
McLaren said the OGR on some gold kiwifruit orchards could fetch $250,000 to $300,00 a canopy hectare.
Fellow PGG Wrightson agent Stan Robb also sold five green and gold orchards in Te Puke last month to a partnership of well-established kiwifruit growers for $36.7m.
"Orchards with particular productivity, infrastructure, and location are in extreme demand. For the five properties sold in early February, we received more than 20 tenders, all close in value, resulting in at least 15 unsatisfied parties who remain able and motivated to purchase.''
Bayleys Realty Group, Bay of Plenty lifestyle and country sales manager Matt Clutterbuck said the sector was also seeing higher demand for quality, gold orchards in sought-after locations.
''A lot of established growers have taken advantage of some good orchards that have been on the market in recent months. We are continuing to list quality gold and green orchards throughout the Bay of Plenty and demand for these has increased in all regions.
''I think people are looking to chase yield and in terms of return on investment kiwifruit is still probably miles ahead of other areas in the commercial world.''
Property Brokers rural sales consultant Brett Ashworth agreed demand was firm for good orchards however banks were being cautious on some approvals.
He said there was a mix of syndicates and individual buyers looking to invest however Ashworth acknowledged potential new growers could find it challenging with the higher prices.
Ashworth was fielding inquiries locally and from around the country.
New Zealand Kiwifruit Growers Inc chief executive Colin Bond said the high prices being paid for orchards reflected the strong growth and returns the industry was projecting in the future.
The projected good returns were likely to attract new growers, expansion from existing growers and equity partnerships.
However, he said new growers must take into account that kiwifruit is a primary industry and has been shown to be susceptible to disruption such as PSA, labour shortages and bad weather.
In the last five years the number of growers had increased by about 15 per cent.
''Kiwifruit is by far New Zealand's largest fresh horticultural export, with more than NZ$2.6 billion in sales of New Zealand fruit last year. This represents the value of more than half of all New Zealand's fresh horticulture exports.''
According to the Real Estate Institute of New Zealand, rural statistics for the three months ending in January and released on Friday show nationally 52 horticulture farms sold for a median price per ha of $316, 980 compared to 44 at $311,940 over the same timeframes the year before.