Kiwifruit property market review | Bay of Plenty | 2020

Kiwifruitheader

Kiwifruit industry going strong

The story from 2012 onward has been one of strong and continuous growth with steady increases in total production areas, improved yields and strong brand recognition.

Demand for kiwifruit globally is expected to grow steadily over the next few years, well supported by strong brand development and education from Zespri, who are proactively investing in expanding its markets and protecting the premium positioning for all of their kiwifruit varieties. 

Bay of Plenty Kiwifruit Property Report 2020

Chris Boyd, Executive Director of Rural and Agribusiness Valuation and Advisory at Colliers, says the industry is emerging strongly and with plenty to be optimistic about, following  a period of structural changes after the PSA outbreak in 2010 and is now focusing on the new IP-licenced varieties.

“Productivity and profit growth in the industry are currently driven by the Gold G3 variety which is gaining significant momentum. The Gold G3 cultivar proved to have greater resistance to PSA, provides better yield and is particularly well accepted in Asia.

“With the conversion of Green to Gold G3 along with greenfield development the mix of plantings is changing. The total production area is now close to 13,000 hectares having surpassed the pre-PSA level with Gold G3 increasing due to the release of new licence and Green reducing with the conversion into Gold G3.

“Both Green and Gold G3 have shown greatly improved financial results. Average industry financial performance of Orchard Gate Return (OGR) per hectare has also shown a significant upward trend from $48,989 to $82,624, a 69 per cent improvement over the last five year period. Gold G3 is, however, the superstar with the industry current average OGR forecast at $158,722 per hectare compared to Green at $70,021 per hectare.

“The sales volume of the last two years belies the ongoing strength in the industry and reflects the lack of properties coming to the market as owners chose to hold rather than sell due to current returns. The market fundamentals and crop price expectations are strong within the industry fuelling the expectation of continuing and increasing value levels.

Boyd says that investment activity is likely to remain strong in both greenfield development and post-gate infrastructure to meet the demand. As the availability of suitable land for planting is limited, some investors are looking to plant the appropriate land within larger blocks while others are prepared to undertake extensive land contouring to achieve the required land quality for planting, pushing the values per canopy hectare even further.

Bay of Plenty Kiwifruit Property Report 2020


Related Experts
expert photo

Chris Boyd

Executive Director | Rural Valuation

Tauranga

Chris has 35 years valuation and consultancy experience across a wide variety of property related matters including compensation, financial reporting statutory compliance, acquisition and rural valuation. He previously held senior positions at both Valuation New Zealand and Quotable Value – where his primary focus was the Bay of Plenty and Waikato regions.

His client work for the firm since 2008 has covered a range of property types and issues including; agribusiness, horticultural ,  lifestyle and residential development land, forestry land valuations, Emission Trading Scheme issues, specialised asset valuations, valuations for financing, due dilligence tax compliance, trust formation, matrimonial disputes and compensation. In addition he has provided expert evidence in the High Court, District Court, Maori Land Court, Environment Court  and Land Valuation Tribunal.

Chris’s infrastructure sector experience has included valuation and advisory projects covering compensation for easement and right of way property interests acquired by Transpower and other leading New Zealand energy companies, for new transmission lines and infrastructure upgrades, and compensation assessments for Crown entities taking property under the Public Works Act 1981 for motorways and pipelines.

His forestry sector experience has encompassed numerous valuation and advisory engagements throughout the country – including advice in relation to devolution of the New Zealand Forestry Service in the late 1980s, land value and rental review assessments as part of Crown Forestry license protocols and Maori Land rental review requirements, various Treaty of Waitangi settlement awards and providing expert evidence.

Chris is based in our Tauranga office and offers our clients sound market advice founded on a comprehensive understanding of the specific sector dynamics and balanced by experience gained working on behalf of owners, regulators and adjudicators in both the public and private domain. He is involved in a number of practice areas including forestry, dairy, Kiwifruit Avocados, infrastructure and pastoral.

Chris is the immediate past chairman of the Tauranga branch of the Property Institute of New Zealand and is a member of  the Waikato No. 4 Land Valuation Tribunal.

View expert