Te Puke Gold orchard sells for $800,000 per hectare

Matt Potton, chief financial officer, Western Bay of Plenty Council. Photo/John Borren

A gold kiwifruit orchard sold early this month for what is believed to be a record of $800,000 per canopy hectare and gold prices are continuing to edge higher, say property experts.

Western Bay of Plenty Council's latest valuation data shows kiwifruit orchards have increased 42 per cent in capital value and 54 per cent in land value since 2014.

The Western Bay of Plenty Council's chief financial officer Matt Potton said the rise in kiwifruit orchard sector valuations reflected the industry's return to investment and expansion post-PSA.

He noted that there had been an initial catch-up in values in 2014, and a further increase for the current valuations, which are effective in July 2017.

"Te Puke and Maketu have led the charge and have seen 65 per cent increases in land value," he said.

PGG Wrightson Real Estate Tauranga-based salesman Stan Robb said the record-setting orchard was in the prime Te Puke-Paengaroa area.

"This time last year, similar properties were selling for $600,000 per canopy ha and two years ago, they were around the $450,000 per canopy ha mark," he said.

John Middleton, a director of valuers Telfer Young, said there had been a couple of sales recently that had exceeded $700,000.

"New records are being achieved."

December through to the beginning of the harvest in March was the prime time to sell, when fruit was on the vine.

"If you sell with the crop on the vine it provides the cash for the purchasers to take the orchard through the next season," Mr Middleton said. "That contributes to the sales values."

Simon Anderson of Bayleys, Country, said the market was seeing astute investors willing to pay high prices for gold kiwifruit.

"They have a very good view of the outlook for gold kiwifruit. We're not surprised at PGG Wrightson's disclosure of a sale at that level. We have seen some big numbers. Well-located and well-managed orchards are attracting record levels."

Zespri's confirmation last month that it will release another 400ha of licences for gold kiwifruit in 2017 has further strengthened the confidence in the sector's property market.

Mr Robb said interest was dominated by current orchardists and packhouses, with bare land for development also in heavy demand.

"Orchardists are keen to exercise the licences that Zespri is making available. Suitable free-draining bare land between 30m and 100m above sea level is scarce. One 8ha block sold in November at $150,000 per ha, with larger properties also highly sought after and a number of other bare land transactions exceeding $100,000 per ha," he said.

Although less sought after than those growing gold, green kiwifruit properties were likely to change hands this season at similar values to last year, around $400,000 per ha for premium orchards.

Western Bay of Plenty Council property revaluations:

Total: Ave change in capital value +30% / Ave change in land value +33%
Kiwifruit orchards: Ave change in capital value +42% / Ave change in land value +54%
Other horticulture: Ave change in land value +38% / Ave change in land value +49%