However, community leaders says the purchase of more than a half-dozen farms shows confidence in the future of dairying in the region.
NZ Super Fund announced earlier this month it bought seven Southland farms, which would be managed by farm management organisation FarmRight.
Federated Farmers Southland president Allan Baird said the NZSF’s purchase, totalling 1200 hectares, in Central Southland was unusual because of its large size, but «it certainly shows a degree of faith to invest in dairy in Southland».
«It’s a positive for dairying in Southland,» he said.
Baird said the deal was the biggest in Southland since five dairy farms, totalling 1206 hectares, in Otapiri were sold for $47.1 million by Southern Sights Ltd to Dairy Farms NZ Ltd in 2015.
The deal is believed to be worth $60 million.
Winton Community Board chair John McHugh said the purchase was a «smart investment» that would benefit the region because of the amount of money involved and the size of the farms.
«It’s a good thing for Central Southland to have farms of that magnitude invested in. Dairy farming has been good for the province.»
He also said the purchase was a positive sign for the dairy industry.
«Dairying not only has a future, it has a presence. If people are willing to invest that much and ride things out, it shows they think it has a future.»
A NZSF spokesperson said the number of farms bought and the amount they were bought for made it the organisation’s largest purchase of farmland.
The spokesperson said a final decision about what to do with the farms had not been made, but that the farms would be managed by farm management organisation FarmRight.
«NZSF has significant scale in dairy and we are always looking to add to our dairy portfolio as opportunities that meet our investing criteria arise, whether in dairy or rural land,» she said.
«We see rural land including dairy as providing investment characteristics that help diversify the fund and will benefit from rising global population and wealth.»
The purchase of the Southland farms means the NZ Super Fund now owns 21 farms in New Zealand – up from 14 before the purchase of the Central Southland farms.
The farms were previously owned by Mike Horgan.
When contacted, Horgan confirmed he had owned the farms.
He declined to comment further.
According to its May 2016 report, rural farmland made up about one per cent of the NZSF’s $30.31 billion portfolio.
Prior to the purchase, the NZSF owned four farms in Southland.
The previous largest rural property purchase by the NZSF was four farms in Waikato in 2011.
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By the numbers: NZ Super Fund purchase of Central Southland Dairy Farms
7 – number of dairy farms bought by NZ Super Fund in Central Southland
21 – total number of farms NZ Super Fund owns nation-wide
1200 – total size of the seven farms in Central Southland, in hectares, bought by NZ Super Fund
$30.31 billion – overall value of NZ Super Fund’s portfolio
Source: Stuff
Link: http://www.stuff.co.nz/business/farming/81985156/decision-on-nz-super-funds-southland-farm-buyup-future-yet-to-be-made
