Pictured: From left Paul Wiltshier, Bay of Plenty Area Sales Manager for FruitFed Supplies and Tim Gallagher of PGG Wrightson Real Estate, Te Puke.
Prospects for horticulture are more positive than they have been for some time.
Global markets are strong, and after a difficult season two years ago, where adverse weather conditions and industry staffing issues combined, and production on some kiwifruit orchards dropped by up to 50 per cent, last year’s crop rebounded, leaving growers and packhouses buoyant.
Tim Gallagher of PGG Wrightson Real Estate, Te Puke, recently named as REINZ 2024/5 Rural Salesperson of the Year nationwide, says positivity among growers means any tier one orchard offered to the market will be welcomed by committed and enthusiastic buyers.
“Demand for properties that meet the premium criteria is insatiable. More than 50 groups of potential purchasers recently inspected a high-production block of green,” says Tim.
Kiwifruit property specialist Dave McLaren, also of PGG Wrightson Real Estate, Te Puke, says buyer enquiry is swelling.
“As we approach this season’s optimum selling stage, with the market showing its strongest momentum in years, a new wave of orchard and bare land listings is arriving on the market.
“While green orchards are rising in value, as ever gold is highly sought after, and even at higher values, some quality orchards are achieving double digit percentage returns,” says Dave.
Development of new orchards is currently playing out in the sector, as Paul Wiltshier, Bay of Plenty Area Sales Manager for FruitFed Supplies, which is part of PGG Wrightson, explains.
“Large scale kiwifruit development, contouring and planting land previously used for dairy or avocadoes, is occurring in the Te Puke area. These large new blocks, comprising up to 100 hectares of new plantings, will come to production in the next four to five years, delivering on the potential identified in Zespri’s projected global market,” says Paul.
Zespri’s annual licence auction, held in May, ensures the sector meets future demand. Enabling growers to plant or convert vines for additional production, the auction also tracks market sentiment. This year licences to plant 250 hectares of new gold kiwifruit vines were made available, selling for $561,000 per hectare, while licences to cut over 150 hectares of green kiwifruit for conversion to gold sold for $454,000 per hectare.
Meanwhile, Tim Gallagher says established orchardists are active in the property market.
“They are looking for A grade production blocks growing green kiwifruit. Whereas in the past such orchards would have attracted interest for cut over and grafting on gold kiwifruit, they are now rising in market value, changing hands at and above $500,000 per canopy hectare. Based on that $500,000, investment in a top producing Hayward orchard, doing 14,000 trays per hectare at $8, would return approximately 12 per cent per annum after costs.
“In the recent challenging times, most orchardists were able to hold tight, with banks willing to support them through. For those bringing on new orchards during this period, it has been more difficult. However, they have now shown what they can do and are another year closer to full production in the orchards they have developed.
“While the mood is now positive, despite the rising property values, many owners intend to stay put and make the most of improved returns. Recent listings are generally from existing growers looking to sell to finance the next stage of new development, or the result of a divestment phase and succession plan,” says Tim.
Paul Wiltshier says the seasonal nature of the industry means prospects for the coming year cannot be accurately gauged until later in spring.
“By late October the bulk of the work has been done, vines are pruned, canes tied down, fertiliser and sprays applied, flowering is finished, and we will be able to better ascertain how much fruit is on the vines. At that point, we will have a good idea where growers and the industry as a whole are at with their numbers for the season.”
Dave McLaren is bringing a suite of high quality kiwifruit properties to the spring market, exemplifying the sector’s investment appeal.
“Current or upcoming listings include a 4.8 canopy hectare mature Maketu, Te Puke block, planted in gold. Flat contour, sound vine support structure and a great production record characterise this desirable package.
“On a larger scale, a 10-canopy hectare gold Edgecumbe orchard provides modern spacings, excellent contour, a high standard of shelter and contemporary support structures. In what will be its first season of full production, buyers in search of size and scale for an efficient growing operation should take note,” he says.
Meanwhile, as an opportunity that ticks all the boxes, east of Te Puke Dave has also listed a 40-hectare parcel of land.
“With the potential of the bare land waiting to be unlocked, location, altitude, scale and all important abundant consented water set this up for development as a first-class orchard.
“As industry confidence continues to rise, and with increasing recognition of horticulture’s strong return profiles, these and several other listings we have on offer represent a timely opportunity in a buoyant and dynamic sector,” says Dave.
Related posts
Back to News & Publications
