Southland forestry blocks sold for NZ5.1m

Two Japanese-owned forestry blocks in Southland will change hands for NZ$5.1 million after consent was granted under the Overseas Investment Act for the sales. Southland Plantation Forest Company of New Zealand received consent to acquire 420ha in Taringatura, and 474ha in Lillburn Valley Rd, Lillburn, under the special test relating to forestry activities.

The vendor was Japanese company Kodansha Treefarm New Zealand Ltd. Southland Plantation Forestry Company of New Zealand was a repeat forestry investor and had existing forests based mainly in the South Otago/Southland region. It intended to continue using the land for production forestry and replant following harvest. The Overseas Investment (Forestry) Amendment Act 2022 recently came into force, changing the assessment criteria for overseas investments that result in the conversion of farmland to production forestry.

The primary change is that overseas consent applications for farm to-forestry conversions are now considered under the general benefit to New Zealand test, rather than the more permissive special forestry test. The new rules did not apply to transactions or applications entered into before August 16. Under the special test, land acquired must be used exclusively or nearly exclusively for forestry activities (maintaining, harvesting and/or establishing a crop of trees for the purpose of plantation forestry, but excluding permanent forestry).

Source: Southland Express