Zespri's global marketing success and careful control of plant variety rights has made it almost impossible for investors to access the gold kiwifruit sector.
Rural investment specialist, MyFarm has just launched a $9 million investment into a large scale Bay of Plenty gold kiwifruit orchard. It is only the second gold orchard MyFarm has been able to offer investors in over three years of hunting throughout the region.
El Dorado Orchards is a 14.2 canopy hectare gold kiwifruit orchard at Paengaroa, at the eastern end of the Tauranga Expressway. Eligible investors will be able to own a stake in the orchard from the minimum investment of $100,000, provided they have applied by Wednesday 14 February.
MyFarm CEO, Andrew Watters says the profitability of the gold kiwifruit sector has created unprecedented demand for orchards in Bay of Plenty. Most go to private tender making it very difficult to put together opportunities for outside investors. Because of the larger scale of the property, MyFarm has been able to negotiate a private sale contract for El Dorado, but with a short three week confirmation time.
"We've had a fantastic response from our clients to this opportunity to be part of Zespri's gold kiwifruit success. They're well aware of how Zespri has strategically built demand ahead of supply through controlling the area of Gold planted, and its focus on marketing and developing new markets."
El Dorado will be leased by well-known orchard manager, DMS Ltd, which operates more than 400 hectares of orchards in Bay of Plenty. DMS has agreed to a 10 + 5 year lease term paying an annual rental of 6% p.a. plus 70% of the orchard profit.
Andrew Watters says the lease model works well for all parties in orchard investments.
"This arrangement with DMS ensures that the investment is passive, minimum returns are underwritten yet good profits are also available in good years."
The El Dorado gold kiwifruit opportunity follows the oversubscribed $13million capital raise pre- Xmas for investment in Rockit apple orchard lease and development.
Watters describes orchards and vineyards as the engine room of a new generation of agricultural investments. These investments are targeting cash returns of 7 – 10% p.a. via a passive lease- based model, based on high quality well-located property, with best of class orchard infrastructure and production capability.
In 2017, MyFarm raised $33 million from New Zealand investors to invest in kiwifruit orchards, vineyards and rural commercial property.