In a rare rejection of an Overseas Investment Office application, Canadians have been barred from buying more than 4500ha of South Island farmland.
Mercury Agriculture LP, 92 per cent controlled by Canadian interests, cannot buy more than 2000ha of South Canterbury and Otago land because it is not in New Zealand’s interests, according to the office decision.
Mercury wanted to buy 2000ha at Rangitata, 1494ha near Ashburton, 816ha near Cromwell and 212ha near Temuka.
Vendors were the owners of Rangitata Dairies Limited Partnership and Rangitata GP Limited New Zealand and the price offered was withheld.
Mercury Agriculture is an investment vehicle for Fiera Comox Partners which established a fund to buy agricultural land and rural producing assets here, in Australia, Canada and the United States, the office said.
Real Estate Institute rural data for the three months ending October showed 11 dairy farms selling for $41,000/ha. If the South Island land was being sold for around that sum, 4500ha might be worth around $184m.
Rangitata Dairies owns eight farms, a dairy support farm in Otago and leases farmland in Canterbury. It intended to use the sale proceeds to convert 111ha of farmland into an orchard, for irrigation and in-shed feeding on some of the dairy farms.
But Minister for Land Information, Eugenie Sage, and Associate Finance Minister David Clark decided against the sale. All the land was classified as sensitive under the Overseas Investment Act because it was farmland.
Such sensitive land is identified as potentially offering substantial and identifiable benefits to New Zealand.