The Overseas Investment Office has confirmed that six more farms will turn to forestry after being sold to overseas buyers, including the Earlyhurst farm near Masterton.
The farms ranged from 264 hectares to 1275ha, with the majority of the land earmarked for planting forestry.
Austrian company Cerberus Vermogensverwaltung bought Earlyhurst, a 944ha sheep and beef farm, for more than $15 million.
The company had invested in forestry operations in New Zealand since 2019.
Of Earlyhurst’s 944ha, 812ha would be used for commercial forestry.
The company planned to subdivide and sell 12ha together with the house, and establish a plantation forest on the best-suited parts of the land [118ha]. It deemed 119ha of the land unplantable.
According to the advertisement for the property, it was only the second time the farm had changed hands in its more than 100-year history.
Planting would begin this year, and trees would be harvested in 25-30 years.
The Overseas Investment Office approved the sales of the sheep and beef and dairy farms.
They were sold through the special forestry test introduced in 2018, which the government was reviewing after farmers had raised concerns that too much productive land was being turned into forestry.
Associate Minister of Finance David Parker said the “streamlined” forestry test would end for overseas investors with plans to plant permanent forests on farms, ensuring forests were planted in the right places for the right reasons.
Instead, proposals from overseas investors looking to convert farms to forests would be considered under the “benefit to New Zealand test”.
“High-quality foreign investment in forestry, and a strong forestry sector, remain important – and we continue to welcome this investment,” Parker said.
“However, as economic and regulatory contexts change, it is important to consider the impact of particular kinds of investment in forestry to ensure that all stakeholders continue to benefit.”
